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What if someone proposed expanding arbitrary data limits?
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Do you mean expand the block size limit? I don't think I'd run that.
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Is that the only bound on data storage? I thought some fields had maximum values.
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Mempool Policy limits some fields. For example transactions above 100,000 vB are considered non-standard and will not get admitted to nodes’ mempools.
Consensus Rules are very lenient to transactions, it has e.g., always been valid to fill the entire block with a single transaction, or even just a single output script (although output scripts over 10,000 bytes are unspendable).
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No. Because I don't see how we can have a "permanent" reduction in arbitrary data storage. People will just figure out other hacky ways to embed arbitrary data. So I don't see the point in chasing. I think the block size limit and the fee market are adequate to address this problem.