Author: Jim Phillips 2015-05-09 19:16:46
Published on: 2015-05-09T19:16:46+00:00
In an email conversation, Pieter Wuille discussed the complex trade-off between UTXOs and fees. The use of more UTXOs leads to larger transactions and higher fees, but if a miner determines that the reduction in UTXO storage requirements is worth the lower fee, there is no protocol level enforcement of a fee. However, using more UTXOs results in more linkage between coins/addresses used, which ultimately lowers privacy. A solution to this issue is to select all the UTXOs from a single address. Keeping the UTXO set small has an economical reason as it makes it easier for individuals to run a full node, which ultimately leads to faster Bitcoin spread and increased value.
Updated on: 2023-06-09T20:28:46.645627+00:00