Bitcoin Core – Fragmentation of UTXOs?
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Episode 18
Every Bitcoin transaction incurs a transaction split due to a) the amount received and b) the transaction fee. Transaction fees are usually several thousand satoshi. Then c) I have control over my private keys and the ‘changes’ remain in my wallet.
Doesn’t all of this result in ever-increasing fragmentation of UTXOs? Could this ultimately make payment impossible?
asked 2 hours ago
richrich
1557 bronze badges
No, transactions can also incorporate UTXOs. A transaction can have multiple inputs and multiple outputs. It is (currently) impossible for inputs to limit the content and number of outputs, and it is also impossible for outputs to limit the content and number of inputs. Therefore, a transaction can have more inputs than outputs, thus reducing the impact on the UTXO set size.
Additionally, transaction fees do not generate UTXO. This is the difference between the output sum and the input sum. Miners can increase the block reward by the difference, so each transaction does not generate UTXOs for fees.
answered 1 hour before
Abba Chow◆Abba Chow
69,0005 gold badges79 silver badges157 bronze badges
One
No, a transaction can have multiple inputs just as it can have multiple outputs, so it is nearly impossible for a transaction to consume more UTXOs than it generates, thus reducing the global UTXO count.
Besides that:
- Change output is not required. Some wallets intentionally try to create transactions that avoid generating change outputs when possible.
- Transaction fees affect the amount miners can collect as block rewards. Typically, the entire reward is awarded on one new transaction output.
answered 1 hour before
merch◆merch
73.2k34 gold badges185 silver badge615 Bronze Badge
