What is Bitcoin Dust?
Bitcoin dust represents minuscule amounts of unspent bitcoin in a transaction that falls below the minimum limit required for processing. This leftover amount, trapped in a wallet or address, poses challenges to transaction validation. Bitcoin dust, can also involve small cryptocurrency amounts sent to numerous wallet addresses. This can either be benevolent or potentially malicious.
Understanding Bitcoin Dust
Transactions on the Bitcoin network demand validation through mining, with miners earning fees for their service. Bitcoin dust arises when the mining fee exceeds the actual transaction value, rendering the transaction impossible.
Understanding Bitcoin Wallet Address Types
There are 4 main Bitcoin wallet types, and they all serve different purposes and have different 'dust limits'. The 'dust limit' of a wallet sets a boundary on the smallest UTXO size (in sats) a wallet can contain, safeguarding users against dust attacks.
Wallet Type | Legacy | Native Segwit | Nested Segwit | Taproot |
Wallet Script Type | P2PKH | P2WPKH | P2SH-P2WPKH | P2TR |
Address Starting with | 1 | bc1q | 3 | bc1p |
Dust Limit | 546 sats | 294 sats | 540 sats | 330 sats |
Legacy addresses were the original Bitcoin address format.
Nested & Native Segwit addresses are commonly used as Payment Wallets.
Taproot Wallets are optimized and used for Ordinal Wallets - To store inscriptions, Rare Sats & Runes.
The Wallet Address Types Used on Magic Eden Wallet
By default, Magic Eden Wallet uses a Native Segwit (starting with bc1q) to store your spendable Bitcoin, and a taproot address (starting with bc1p) for inscriptions, ordinals or rare sats. This provides a clear segregation between your spendable Bitcoin and ordinal inscriptions.
