Could Bitcoin Start Showing Satoshis?

Quantum computing has long been a concern for Bitcoin and crypto markets, posing a security risk to the underlying cryptography. However, a new threat has emerged in the form of a controversial “cat” bitcoin reform proposal, sparking a heated debate among developers that millions of text-related results will be permanently unavailable.

The draft BIP seeks to address concerns about blockchain bloat, raising key questions around property rights and core Bitcoin principles. Community responses ranged from strong support to warnings about setting a dangerous precedent.

Bitcoin Developers Debate BIP “The Cat”: Proposal to Fight UTXO Spam with Standard and Stamp

Each Bitcoin transaction withdraws coins from previous transactions. Transaction results represent the amount of bitcoins allocated to addresses. If an output has not yet been used, it will be an uncapped transaction output (UTXO).

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Basically, a UTXO is a piece of Bitcoin that you can spend in the future.

The plan explains the recent doubling of Bitcoin's UTXO, which is set at over 160 million entries by 2023, most of which originate from Ordinals and Bitcoin Stamps.

In recent years, Bitcoin's collection of unpaid transaction output has grown exponentially, creating a challenge for node operators and miners. According to the draft discussion, UTXO will increase from about 80-90 million to 160 million in 2023.

Now, nearly half hold fewer than 1,000 satoshis, most of which are used as a form of storage rather than cash transactions.

This increase is mainly due to plain text and Bitcoin Stamps that put information in the Taproot witness field, which creates results that do not come out with falsely empty multi-sig addresses.

These methods bypass rules like OP_RETURN, which were originally created to prevent blockchain bloat by limiting non-monetary data. The OP_RETURN 80-byte transfer policy reduced bloat, but recent techniques use new transaction formats to store arbitrary data.

The impact is huge. Each node must load the entire set of UTXOs to confirm transactions, increasing costs for miners and anyone running multiple nodes.

Bitcoin developer Mark Ehrhardt described the use of UTXO sets of stamps as “probably one of the worst uses of blockchain, from a technical perspective.”

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Historically, Bitcoin has prioritized monetary transactions and limited data usage. Bitcoin Core developer Greg Maxwell said of the OP_RETURN limits, “Part of the idea here is to shape behavior toward conservative interests.

However, both ordinals and stamps bypass these rules, prompting arguments for stronger measures such as “cat”.

In the “cat” BIP proposal

The proposal introduces non-monetary UTXOs (NMUs), denoted by pointers with NMU bits. Script-related results defined in this way are costless, making them unavailable as marketing resources.

Nodes cut these effects, reducing storage requirements and costs.

“The new BIP proposal “CAT” aims to combat spam from Bitcoin commoners and stamps in depth: by freezing Satoshis in communication. The idea is to make millions of small UTXOs useless for storing information. Creating an unprecedented precedent, removing those Satoshis from circulation,” he wrote about the introduction of the Livecoin account.

Classification is based on value thresholds, focusing on UTXOs below 1,000 satoshis in certain windows. When the feature is enabled, nodes will ignore these NMUs during transaction authentication.

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Advocates say this prevents spam economically because it eliminates ongoing technical filtering. Proponents, like TwoLargePizzas, believe the benefits last after a single cleanse.

By making it clear that Bitcoin does not accept non-financial bloat, “Cat” can prevent future spam. Nona Yobidnes pointed out that spam accounts for 30-50 percent of all UTXO, calling the proposal a “powerful anti-spam” for the network.

BIP targets millions of unused dust particles, each of which uses up valuable resources. For large services, this cumulative burden means real infrastructure costs and slower cross-node synchronization times for newcomers.

Debate: Property Rights and Bitcoin's Core Values

Opponents present strong arguments, calling the proposal a drastic change in the main characteristics of Bitcoin. Lead developer and privacy advocate Greg Maxwell sees modest storage savings as little justification for “disabling UTXOs” and calls it an “asset grab,” which hurts Bitcoin values.

Developer Ataraxia 009 warns the change “represents a dangerous slippery slope.” Freezing certain UTXOs on the consensus layer could open the door to future coin raids.

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This issue resonates with a community focused on opposing censorship and confiscation.

The discussion focuses on whether Bitcoin should discriminate between transaction types at the protocol level.

Proponents see it as a way to stop spam attacks, while critics warn that it makes the protocol vulnerable to judging the legitimacy of any transaction.

If the network is willing to remove satoshis based on their usage, some broader interventions may follow.

The debate also touches on the identity of Bitcoin. Is Bitcoin only a monetary system or does the establishment of censorship extend to all valid transactions?

Supporters cite the practice of limiting data storage, but opponents note that formalities and seals still apply under current laws.

Community feedback is ongoing during the draft review period, prior to any official BIP submission. The result will affect technical decisions and how to balance Bitcoin's core values ​​and operational needs.

Regardless of the outcome of the “cat”, the discussion shows the tension between efficiency and principle as Bitcoin continues to scale and face new challenges.