Maxwell's Maxwell's Clash: Bitcoin 'The Cat' Proposal Divides Developers on UTXO Purge

A controversial Bitcoin improvement proposal known as ‘The Cat’ has ignited significant friction within the developer community, with respected figures like Greg Maxwell raising red flags about its implications.

At the heart of the dispute lies a fundamental question: Should Bitcoin actively remove what are deemed “junk” UTXOs from circulation? The proposal targets a real problem—ordinals and inscriptions have bloated the blockchain, creating millions of small, economically useless outputs that clog the UTXO set. Estimates show these spam transactions now comprise 30% to 50% of all UTXOs, straining node resources.

The Purge Argument

Proponents of ‘The Cat’ see permanent UTXO removal as a pragmatic solution. By permanently marking millions of small UTXOs as unspendable and expunging them from the UTXO set, they argue Bitcoin can shed dead weight and restore efficiency. They frame it as an economic barrier—if users know their tiny outputs will be purged, they’ll stop creating them in the first place.

The Seizure Concern

However, developer Greg Maxwell and other opponents sound a more ominous note. They warn that this precedent could open a Pandora’s box for consensus-level asset seizure. Once Bitcoin starts deciding which UTXOs are “too small to live,” what stops future proposals from targeting other deemed-undesirable outputs? Opponents view this as a betrayal of Bitcoin’s foundational value: censorship resistance and immutable property rights at the consensus layer.

The debate underscores a deeper tension: Can Bitcoin optimize without sacrificing its principles? As the community wrestles with this question, ‘The Cat’ proposal stands as a litmus test for what Bitcoin is willing to compromise.