To provide a bit of context, in March 2013 Gregory Maxwell wrote a patch for bitcoin core that censored satoshidice transactions by refusing to relay or mine transactions with outputs less than 10k sats. https://bitcointalk.org/index.php?topic=149668.msg1598216#msg1598216
This patch was explicitly called out as censorship by people in that thread (see the post by OneMiner at the top of that thread) but within a few months bitcoin merged a code change that implemented a less severe form of the same thing, making the dust limit 5400 sats. Satoshi Dice relied on its ability to create utxos below that dust limit as a way to alert users of the service if they lost. But once that change went into place, the number of dust transactions fell drastically.
In other words, censorship works. I'd like to use it once again and "dust" off this reliable old tool from our tool belt.
I'm not sure it's 100% accurate to say it blocking dust transactions directly killed SatoshiDice. SatoshiDice could have keep running, it would have just cost more (min 10k sats) for each of their "alert transactions". The BTC price going up significatly in 2013 also undermined the SatoshiDice business model.
I think a similar things will happen with inscriptions, as fees rise. Looking at mempool.space, a inscription transaction costs $75+ while a simple payment transaction costs something like $0.25. If the BTC price quadruples (or the sat/B fee rate quadruples) then inscriptions become expensive quickly, while transactions remain perfectly viable for everything more expensive than a coffee.
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SatoshiDice could have keep running, it would have just cost more (min 10k sats) for each of their "alert transactions".
Even that isn't true. It's not a real cost. Just money they have to take out of the bet that they're giving back to the user in a few seconds when the bet completes.
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Thanks the clarification, I'm not an expert on the specifics. But from what I remember from around that time, is that SatoshiDice was basically "priced out" of using the Bitcoin blockchain as the transaction fees rose above a fraction of a penny.
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Fees rising probably killed them indeed. Also, people get bored of novel things eventually too.
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