Bitcoin is about to freeze its coins? The proposal of the Cat divides society

Quantum computing remains a concern for the Bitcoin and cryptocurrency markets, posing a security threat to their underlying crypto system. However, a new threat is emerging as a controversial proposal to improve the “cat” of Bitcoin, sparking a heated debate among developers about the classification of millions of currency outputs as permanently unspendable.

The draft Bitcoin business plan aims to address concerns about blockchain inflation, which raises major questions about property rights and the fundamental principles of Bitcoin. Community responses ranged from strong support to warnings to create a risky precedent.

Bitcoin Developers Discuss “Cat” BIP: Proposal to Combat Spam UTXO Messages from Ordinal Numbers and Stamps

Each Bitcoin transaction spends coins that come from previous transactions. Transaction results represent amounts of Bitcoin allocated to addresses. If the output is not yet spent, it becomes an Unspent Transaction Output (UTXO).

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Simply put, UTXO is a part of Bitcoin that you can spend in the future.

The plan addresses the recent expansion of Bitcoin’s UTXO index, which recorded more than 160 million shares in 2023, most of which resulted from… Ordinals and Bitcoin stamps.

In recent years, Bitcoin’s pool of non-consumable transaction production has grown significantly, posing challenges for node operators and miners. According to the draft discussion According to research, the number of UTXOs has grown from about 80-90 million to more than 160 million during 2023.

Now, almost half of them contain less than 1,000 satoshi, and most of them are used as a means of storage rather than for financial transactions.

This growth is mainly due to Ordinals sprites, which place data in witness fields in Taproot, and Bitcoin stamps, which create non-expendable outputs through multiple fake signature addresses.

These methods bypass rules like OP_RETURN, which were originally created to prevent blockchain inflation by restricting non-financial data. 80 deportation policy bytes in OP_RETURN It reduces inflation, but new technologies exploit new transaction formats to store arbitrary data.

The effect is great. Each node must load the entire pool of UTXOs to verify transactions, which increases costs for miners and anyone running multiple nodes.

Bitcoin developer Mark Erhardt described Stamps’ use of the UTXO block as “probably, technically speaking, one of the most egregious uses of blockchain.”

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Historically, Bitcoin has prioritized financial transactions and limited data usage. He said Bitcoin Core developer Greg Maxwell on OP_RETURN Boundaries: “Part of the idea here is to shape behavior toward conservative needs.”

In any case, the rules and stamps go beyond these rules, feeding arguments for stronger measures, such as the “cat”.

Within the “cat” proposal for the BIP project

The proposal introduces UTXO non-monetary units (NMU), which catalogers mark with the NMU bit. Pattern-related outputs defined in this way will become unbankable, making them unavailable as transactional input.

Nodes cut these outputs, reducing storage needs and costs.

“The new ‘cat’ proposal of BIP aims to fight the theft of Ordinals and Stamps on Bitcoin radically: by freezing satoshis by consensus. The idea is to make millions of tiny UTXO used to store data permanently indispensable, removing those satoshis from circulation at the expense of creating an unprecedented precedent for demonetization”, sa. books Livecoins, a popular account on X.

The ranking is based on value limits, with an emphasis on UTXOs below 1,000 satoshi during certain windows. When the feature is enabled, nodes ignore these unstable units while validating transactions.

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Supporters argue that this will deter economic pollution, because it avoids the constant technical filter. Supporters, like TwoLargePizzas, believe the benefits go far beyond a one-time cleaning.

By making it clear that Bitcoin rejects non-monetary inflation, the “cat” can prevent future spam. Nona Eupidense notes that spam makes up 30-50 percent of all UTXO zones, calling the proposal a “strong anti-spam message” for the network.

The BIP project targets the millions of powders that remain unspent, each of which uses up precious resources. For large-scale services, this cumulative overhead means real infrastructure costs and slower node synchronization times for new entrants.

Discussion: Property Rights and Fundamental Values ​​of Bitcoin

Opponents make strong arguments, describing the proposal as a radical change in the basic characteristics of Bitcoin. Greg Maxwell, a prominent developer and privacy advocate, sees a modest storage provision as little justification for “disabling UTXO” and describes it as an “asset seizure,” undermining Bitcoin’s values.

Developer Ataraxia 009 warns that the change “represents a dangerous and slippery slope”. By freezing some library institutions in the consent layer, it can open the door to future currency seizures.

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This issue resonates with a society centered on resistance to censorship and confiscation of assets.

The debate centers on whether Bitcoin should differentiate between transaction types at the protocol level.

Supporters see spamming as an attack that must be stopped, while critics warn that it could give the protocol the power to assess the legitimacy of each transaction.

If the network is willing to remove satoshis based on their usage, some fear a wider intervention could follow.

The discussion also explores the identity of Bitcoin. Is Bitcoin only a monetary system, or does its resistance to censorship extend to all valid transactions?

Supporters cite the tradition of restricting data storage, but opponents point out that ordinal numbers and stamps still apply under the current rules.

Community feedback will continue during draft review, prior to any formal submission of the BIP. The outcome will impact technical decisions and how Bitcoin balances core values ​​and operational needs.

Regardless of the outcome of “The Cat,” the debate highlights the tensions between efficiency and principle as Bitcoin continues to expand and face new challenges.