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If you receive 1 satoshi (0.00000001 bitcoin) in a transaction then adding it as an input to a larger transaction would add more than 1 satoshi to the transaction fee. This means the 1 satoshi shows in the total balance for your wallet, but in reality it is not worth anything to you because it would cost more than 1 satoshi to spend. In fact if you need to empty the wallet completely then the 1 satoshi is causing a loss.

So how small can a payment be while still adding value to your wallet?

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You generally would not be able to receive a single satoshi.

The Bitcoin Protocol defines something known as a "dust limit".

The exact value of this limit varies based on the receiving address type, but it is defined as the minimum amount of BTC required to spend an input for a given address type.

It is calculated by using a basic 1 input 1 output transaction consuming an input from that address type at the minimum acceptable fee level, and calculating its fee (minimum fee level * tx size).

This works out to 546 satoshis for traditional p2pkh addresses, and 294 for p2wpkh addresses.

Transactions that create one or more outputs under the dust limit will be rejected by the network and you will not be able to broadcast them (even if other outputs in the transaction are above the dust limit). If you're left with a value under the dust limit as change, most wallets will add it to the fee.

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  • from what i read, dust limit is applicable only for output. How does it applicable to input? – Cisco Mmu Jul 10 '20 at 15:34
  • It isn't - if you somehow have an output under the dust limit, you can spend it, but you will need to combine it with another output with a large enough value to be able to pay enough in fees AND create new outputs that adhere to the dust limit – Raghav Sood Jul 10 '20 at 16:26
  • ok noted . tq for the clarification – Cisco Mmu Jul 11 '20 at 5:35
  • Good answer with useful details. Dust limit = when a payment amount becomes harmful to your wallet. I would just like to add that I have received 1 satoshi payments many times. Annoying spam transactions. – Dr.Haribo Jul 11 '20 at 10:30
  • @Dr.Haribo Can you provide a link to any such tx (not necessarily from your wallet) – Raghav Sood Jul 11 '20 at 14:06

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