Lesser known reasons to keep blocks small, in the words of Bitcoin Core developers
Elliot Olds
4811

I’m in favor of small blocks. I do believe that bigger blocks will bring more fees. Smaller blocks will also bring more fee per transaction. I don’t know which method is good, for miner / people.

My only fear against bigger blocks is UTXO bloat. Even 2 MB blocks with segregated witness, would allow as much as 4x transactions. There’s a possibility of adding 2.4 million UTXO/day.

In 8 years, we have about 34.84 million UTXO (Feb 24, 2016). 1 million UTXO of 100 bits each, needs 100 BTC, but actual cost is transaction fee 10 BTC.

Somebody with 100k BTC, can choose to put it in 100 million different UTXO. How we are going to stop this kind of bloat?