Author: Bob McElrath 2015-05-10 13:35:25
Published on: 2015-05-10T13:35:25+00:00
The issue of unspent transaction outputs (UTXOs) and their growth in the Bitcoin network has been a topic of discussion for some time, with various proposals being suggested to address it. One proposal put forward by Jim Phillips is to deal with the issue at the wallet level rather than the protocol level. Phillips suggests that wallets should consolidate UTXOs by selecting all unspent outputs from a particular address or wallet when building a transaction, sending the required amount to the payee and sending the remainder back to the same address or a change address as a single output. This would limit the growth of the UTXO database over time. Phillips notes that most users are running a handful of different wallet apps, and the developers of these wallets have a vested interest in the continued usefulness of Bitcoin. However, there are challenges to this proposal, including the fact that spending unconfirmed outputs requires a different security model on the part of the receiver, and wallet software that refuses to spend unconfirmed outputs. Another proposal put forward by an anonymous user is a fork/merge design where the change is computed by the network instead of the submitter. This would allow two transactions having the same change address and a common input to be straightforwardly merged or split (in a reorg), where with bitcoin currently it would be considered a double-spend. This proposal has big privacy implications since it directly exposes the change address, and is a hard fork, but is much closer to what people expect of a debit-based "account" in traditional banking. Overall, the issue of UTXOs and their growth in the Bitcoin network remains a challenge, with various proposals being suggested to address it.
Updated on: 2023-06-09T20:29:01.795554+00:00