When SegWit was introduced in 2017, the “witness discount” was justified as a way to encourage adoption and to fix signature malleability. This discount made sense when witness data was primarily signatures and spending conditions.
With Taproot in 2021, the same discount applied. However, witness fields are now widely used for inscriptions, embedding large amounts of arbitrary data. This means inscription transactions pay less in fees per byte than they would if the same data was stored in OP_RETURN.
My questions:
- Why is the witness discount still applied to inscription data, given that it is not signatures but arbitrary payloads?
- Was the possibility of abuse for data storage considered when SegWit and Taproot were designed?
- Would removing or adjusting the discount for non-signature witness data be technically feasible, and if so, why has it not been proposed or merged?
- How do current Core defaults ensure that block space remains prioritized for monetary transactions rather than subsidized storage?
