It's a very complex trade-off, which is hard to optimize for all use cases. Using more UTXOs requires larger transactions, and thus more fees in general. In addition, it results in more linkage between coins/addresses used, so lower privacy. The only way you can guarantee an economical reason to keep the UTXO set small is by actually having a consensus rule that punishes increasing its size. On May 9, 2015 12:02 PM, "Andreas Schildbach" wrote: > Actually your assumption is wrong. Bitcoin Wallet (and I think most, if > not all, other bitcoinj based wallets) picks UTXO by age, in order to > maximize priority. So it keeps the number of UTXOs low, though not as > low as if it would always pick *all* UTXOs. > > > On 05/09/2015 07:09 PM, Jim Phillips wrote: > > Forgive me if this idea has been suggested before, but I made this > > suggestion on reddit and I got some feedback recommending I also bring > > it to this list -- so here goes. > > > > I wonder if there isn't perhaps a simpler way of dealing with UTXO > > growth. What if, rather than deal with the issue at the protocol level, > > we deal with it at the source of the problem -- the wallets. Right now, > > the typical wallet selects only the minimum number of unspent outputs > > when building a transaction. The goal is to keep the transaction size to > > a minimum so that the fee stays low. Consequently, lots of unspent > > outputs just don't get used, and are left lying around until some point > > in the future. > > > > What if we started designing wallets to consolidate unspent outputs? > > When selecting unspent outputs for a transaction, rather than choosing > > just the minimum number from a particular address, why not select them > > ALL? Take all of the UTXOs from a particular address or wallet, send > > however much needs to be spent to the payee, and send the rest back to > > the same address or a change address as a single output? Through this > > method, we should wind up shrinking the UTXO database over time rather > > than growing it with each transaction. Obviously, as Bitcoin gains wider > > adoption, the UTXO database will grow, simply because there are 7 > > billion people in the world, and eventually a good percentage of them > > will have one or more wallets with spendable bitcoin. But this idea > > could limit the growth at least. > > > > The vast majority of users are running one of a handful of different > > wallet apps: Core, Electrum; Armory; Mycelium; Breadwallet; Coinbase; > > Circle; Blockchain.info; and maybe a few others. The developers of all > > these wallets have a vested interest in the continued usefulness of > > Bitcoin, and so should not be opposed to changing their UTXO selection > > algorithms to one that reduces the UTXO database instead of growing it. > > > > From the miners perspective, even though these types of transactions > > would be larger, the fee could stay low. Miners actually benefit from > > them in that it reduces the amount of storage they need to dedicate to > > holding the UTXO. So miners are incentivized to mine these types of > > transactions with a higher priority despite a low fee. > > > > Relays could also get in on the action and enforce this type of behavior > > by refusing to relay or deprioritizing the relay of transactions that > > don't use all of the available UTXOs from the addresses used as inputs. > > Relays are not only the ones who benefit the most from a reduction of > > the UTXO database, they're also in the best position to promote good > > behavior. > > > > -- > > *James G. Phillips > > IV* > > /"Don't bunt. Aim out of the ball park. Aim for the company of > > immortals." -- David Ogilvy > > / > > > > /This message was created with 100% recycled electrons. Please think > > twice before printing./ > > > > > > > ------------------------------------------------------------------------------ > > One dashboard for servers and applications across Physical-Virtual-Cloud > > Widest out-of-the-box monitoring support with 50+ applications > > Performance metrics, stats and reports that give you Actionable Insights > > Deep dive visibility with transaction tracing using APM Insight. > > http://ad.doubleclick.net/ddm/clk/290420510;117567292;y > > > > > > > > _______________________________________________ > > Bitcoin-development mailing list > > Bitcoin-development@lists.sourceforge.net > > https://lists.sourceforge.net/lists/listinfo/bitcoin-development > > > > > > > ------------------------------------------------------------------------------ > One dashboard for servers and applications across Physical-Virtual-Cloud > Widest out-of-the-box monitoring support with 50+ applications > Performance metrics, stats and reports that give you Actionable Insights > Deep dive visibility with transaction tracing using APM Insight. > http://ad.doubleclick.net/ddm/clk/290420510;117567292;y > _______________________________________________ > Bitcoin-development mailing list > Bitcoin-development@lists.sourceforge.net > https://lists.sourceforge.net/lists/listinfo/bitcoin-development >