Author: Matt Whitlock 2015-05-10 02:11:13
Published on: 2015-05-10T02:11:13+00:00
The problem of minimizing the number of unspent transaction outputs (UTXOs) in a wallet was discussed on a mailing list by Jim Phillips. Wallets typically select only the minimum number of UTXOs when building transactions, to keep the fee low, which leads to lots of UTXOs being left unused and lying around until some point in the future. Phillips suggested designing wallets to consolidate UTXOs by selecting them all for a transaction, sending what needs to be spent to the payee, and sending back the rest to the same address or a change address as a single output. This method would shrink the UTXO database over time rather than growing it with each transaction. Phillips argued that this idea could limit the growth of the UTXO database, at least until Bitcoin gains wider adoption, and developers of wallet apps should not be opposed to changing their UTXO selection algorithms to reduce the UTXO database instead of growing it. Miners would also benefit from these types of transactions as they would reduce the amount of storage they need to dedicate to holding the UTXO. Relays could enforce this type of behavior by refusing to relay or deprioritizing transactions that don't use all available UTXOs from input addresses.
Updated on: 2023-06-09T20:31:48.992271+00:00