Bitcoin Core's Coin Selection optimizes for minimal change outputs. How does Bitcoin Core prevent Change outputs of sizes below dust threshold from occurring?
2 Answers
See these lines:
// We do not move dust-change to fees, because the sender would end up paying more than requested.
// This would be against the purpose of the all-inclusive feature.
// So instead we raise the change and deduct from the recipient.
if (nSubtractFeeFromAmount > 0 && newTxOut.IsDust(::minRelayTxFee))
{
CAmount nDust = newTxOut.GetDustThreshold(::minRelayTxFee) - newTxOut.nValue;
newTxOut.nValue += nDust; // raise change until no more dust
for (unsigned int i = 0; i < vecSend.size(); i++) // subtract from first recipient
{
if (vecSend[i].fSubtractFeeFromAmount)
{
txNew.vout[i].nValue -= nDust;
if (txNew.vout[i].IsDust(::minRelayTxFee))
{
strFailReason = _("The transaction amount is too small to send after the fee has been deducted");
return false;
}
break;
}
}
}
So Bitcoin core will give slightly less to the recipient rather than spend more than the payer originally requested, in the case of a dust-change output.
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1Then there's the question of whether or not this is a good policy... I don't believe it is. I think that as infrequently as dust change happens, just let miners have it and get a slightly faster confirmation time. Commented Sep 1, 2015 at 11:59
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It might not be good network policy, but it doesn't seem like users have an incentive to destroy dust UTXO's sent to them. Commented Sep 2, 2015 at 4:00
Bitcoin Core actually creates a minimum change of 0.01 BTC
(if it has sufficient funds), if it can't produce a direct match.
In the rare case that it doesn't have sufficient funds to produce a non-dust change output, it will do the weird stuff Stephen mentions.