While everyone's distracted by jpegs, something else is burning blockspace and bloating the UTXO set.
Over the past month, it may have used up to 2% of block capacity, created 0.4% of the current UTXO set, and fueled the recent spike in P2TR outputs.
mempool.space/block/00000000…
Each of the tiny transactions in that block spends a P2WSH input with a complex witness script.
It pays exactly 606 sats in fees, and creates a single P2TR output with a small round number of satoshis - usually 2500, 5000, or 10000.
mempool.space/tx/512e863a7b2…
The P2WSH inputs are peeled off one by one in precise amounts in long chains of apparently pointless transactions.
These chains of transactions are tied together at common "sources" and "sinks".
Here, for example, 4 BTC is unrolled over a few transactions to begin 200 new peel-chains.
mempool.space/tx/c1fc15381f3…
There are a *lot* of these, stretching back to late 2021, but accelerating in volume recently.
Searching the blockchain for activity matching the pattern gives us a rough upper bound of ~1.6 million transactions in total, about half of which occurred after Jan 1st 2023.
The distinctive locking script is interesting - a kind of HTLC similar to those used in Lightning.
It is spent either by signing with two keys and revealing a 32-byte preimage, or by a different key after a certain block height (~64 blocks in the future)
Because the long script enjoys the witness discount, blocks containing lots of these transactions are larger than average.
In fact, they're responsible for some of the largest blocks of all time.
So, two final questions:
1) Who can tell me what they're for?
2) Is anyone working on a spam filter for this garbage yet? #Bitcoin
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