What Is the Dust Limit?
The dust limit is the minimum amount of bitcoin that makes economic sense to transact. A UTXO is considered "dust" if its value is so small that it would cost more in transaction fees to spend it than it's actually worth.
Economic Viability
If a UTXO contains 500 satoshis but requires 1,000 satoshis in fees to spend, it's economically unspendable dust. The dust threshold varies based on current fee rates and transaction types.
Why Dust Matters
UTXO Management
Receiving many small payments creates dust UTXOs that become expensive to consolidate. Good coin selection strategies help avoid accumulating dust by consolidating UTXOs during low-fee periods.
Network Protection
Bitcoin nodes may reject transactions that create dust outputs to prevent blockchain bloat. The standard dust threshold is around 546 satoshis for most output types, though this can vary by implementation.
Understanding dust limits is important for wallet management and optimizing transaction costs. Using SegWit or Taproot addresses reduces transaction sizes, making smaller UTXOs more economically viable to spend.
Quick Facts
- •Typically 546 satoshis for standard outputs
- •Costs more to spend than its value
- •Can pollute the UTXO set