Author: Jim Phillips 2015-05-09 21:11:57
Published on: 2015-05-09T21:11:57+00:00
The email thread discusses the criteria for selecting UTXOs (unspent transaction outputs) while making a Bitcoin transaction. The proposed criteria are as follows: 1) Select the smallest possible set of addresses that can be linked to come up with enough BTC to send to the payee. 2) Given multiple possible sets, select the one that has the largest number of UTXOs. 3) Given multiple possible sets, choose the one that contains the largest amount of total BTC. 4) Given multiple possible sets, select the one that destroys the most bitcoin days. 5) If there's still multiple possible sets, choose one at random. The final set of addresses should use all UTXOs from that set and send appropriate outputs to the recipient(s), a new change address, and a mining fee. Miners should reward users who consolidate UTXOs, which can be easily spotted by checking if all possible UTXOs from each input address have been used. In addition, the email thread also discusses the role of age in determining UTXO selection. Miners do not care about the age of UTXO entries except for two exceptions. Firstly, there is a free transaction policy that sets aside a small portion of block space for transactions that do not pay sufficient fees. These transactions must consume another scarce resource, even if not money, and are required to be of sufficient priority (computed as BTC-days-destroyed per byte). Secondly, Coinbase transaction outputs can only be spent after 100 confirmations as a consensus rule to prevent random reorganizations from invalidating transactions that spend young coinbase transactions. Wallets also select more confirmed outputs first to consume for the same reason.
Updated on: 2023-06-09T20:30:28.309024+00:00