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After all, what prevents a GOVERNMENT from attacking Bitcoin by spending a relatively modest amount of money, taking Bitcoin and "dividing it up" into millions of UTXOs for which only THEY have the keys? Even more agree with you here.
What will this accomplish other that bloating the UTXO set?
That's exactly what it would accomplish.... bloat the UTXO set faster (the set is always growing, typically). That makes it harder to run a node over time, and could be an attack vector. At least that's what I would do
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