Author: Mike Hearn 2015-05-25 18:44:18
Published on: 2015-05-25T18:44:18+00:00
Wallets need to do a better job with defragmentation in order to avoid high fees when making payments with many tiny UTXOs. However, the reason why wallets don't prioritize this issue is due to manpower. A solution proposed by a wallet developer is to make free transactions more reliable so that wallets can submit free transactions to consolidate UTXOs during low demand periods. This would help defragment UTXOs and reduce transaction fees. Without such a solution, wallets won't automatically defragment as it would be difficult to explain to users why their money is slowly leaking out of their wallet without their knowledge. Another solution suggested is to take advantage of the fee structure based on rounded 1kb calculation, where adding more outputs and making a bigger change output becomes "free" for another output or two. However, wallets do not currently exploit this method.
Updated on: 2023-06-09T20:31:13.004431+00:00