A suggestion for reducing the size of the UTXO database

> 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.

> 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* <https://plus.google.com/u/0/113107039501292625391/posts>
> /"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./
>
>
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> On Sat, May 09, 2015 at 12:09:32PM -0500, Jim Phillips wrote:
> > 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.
>
> You can't assume that UTXO growth will be driven by walles at all; the
> UTXO set's global consensus functionality is incredibly useful and will
> certainly be used by all manner of applications, many having nothing to
> do with Bitcoin.
>

> 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.
>
> Is it not fair to say though that UTXO database growth is not considered

> 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* <https://plus.google.com/u/0/113107039501292625391/posts>
> > /"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./
> >
> >
> >
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> >
> >
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> >
>
>
>
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> 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.
>

>   Not necessarily. If you want to ensure privacy, you could limit the
> selection of UTXOs to a single address, and even go so far as to send
> change back to that same address. This wouldn't be as effective as
> combining the UTXOs from multiple addresses, but it would help. The key is
> to do everything that can be done when building a transaction to ensure
> that as many inputs as possible are consolidated into as few outputs as
> possible.
>
>
>  I would agree if you have multiple utxo for a single address then it
> makes sense since there is no privacy loss. However sending the change back
> to the same address would damage privacy (Hive does this) as it is then
> obvious from looking at the transaction which output is change and which
> output is sending funds.
>

>  Also not everyone is concerned with their own privacy, and I'm not aware
> of any HD-wallet implementations that won't already combine inputs from
> multiple addresses within that wallet without user input.
>
>
>  For people who do not care for privacy then it would work fine. But
> adding it into the wallet as default behaviour would deter those who do
> care for privacy - and making it a customisable option just adds complexity
> for the users. Wallets do need to combine utxo at times to spend bitcoins
> which is how people can be tracked today, using the minimum set of utxo
> tries to reduce the risk.
>
> Different wallets are targeted at different demographics. Some are geared

>   Additionally, large wallets that have lots of addresses owned by
> multiple users like exchanges, blockchain.info, and Coinbase can
> consolidate UTXOs very effectively when building transactions
>
>
>  That's true - I'm not sure how they would feel about it though. I
> imagine they probably are already to minimise key management.
>
> That's what these discussions are for. Hopefully this thread will be seen

>

> Lack of privacy is viral.  We shouldn't encourage policy in most wallets
> that discourages privacy.  It adversely affects privacy across the entire
> network.
>

> On Sat, May 9, 2015 at 2:06 PM, Pieter Wuille <pieter.wuille@gmail•com
> <mailto:pieter.wuille@gmail.com>> wrote:
>
>     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.
>
> Unless the miner determines that the reduction in UTXO storage
> requirements is worth the lower fee. There's no protocol level
> enforcement of a fee as far as I understand it. It's enforced by the
> miners and their willingness to include a transaction in a block.
>
>     In addition, it results in more linkage between coins/addresses
>     used, so lower privacy.
>
> Not if you only select all the UTXOs from a single address. A wallet
> that is geared more towards privacy minded individuals may want to
> reduce the amount of address linkage, but a wallet geared towards the
> general masses probably won't have to worry so much about that.
>
>     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.
>
> There's an economical reason right now to keeping the UTXO set small.
> The smaller it is, the easier it is for the individual to run a full
> node. The easier it is to run a full node, the faster Bitcoin will
> spread to the masses. The faster it spreads to the masses, the more
> valuable it becomes.
>
>
>
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> How about this as a happy medium default policy: Rather than select UTXOs
>> based solely on age and limiting the size of the transaction, we select as
>> many UTXOs as possible from as few addresses as possible, prioritizing
>> which addresses to use based on the number of UTXOs it contains (more being
>> preferable) and how old those UTXOs are (in order to reduce the fee)?
>
> If selecting older UTXOs gives higher priority for a lesser (or at least
> not greater) fee, that is an incentive for a rational user to use the older
> UTXOs.  Such policy needs to be defended or removed.  It doesn't support
> privacy or a reduction in UTXOs.
>

> That policy is included in Bitcoin Core.  Miners use it because it is the
> default.  The policy was likely intended to help real transactions get
> through in the face of spam.  But it favors those with more bitcoin, as the
> priority is determined by amount spent multiplied by age of UTXOs.  At the
> very least the amount spent should be removed as a factor, or fees are
> unlikely to ever be paid by those who can afford them.  We can reassess the
> role age plays later.  One change at a time is better.
>  On 9 May 2015 12:52 pm, Jim Phillips <jim@ergophobia•org> wrote:
>
> On Sat, May 9, 2015 at 2:43 PM, Raystonn <raystonn@hotmail•com> wrote:
>
> How about this as a happy medium default policy: Rather than select UTXOs
> based solely on age and limiting the size of the transaction, we select as
> many UTXOs as possible from as few addresses as possible, prioritizing
> which addresses to use based on the number of UTXOs it contains (more being
> preferable) and how old those UTXOs are (in order to reduce the fee)?
>
> If selecting older UTXOs gives higher priority for a lesser (or at least
> not greater) fee, that is an incentive for a rational user to use the older
> UTXOs.  Such policy needs to be defended or removed.  It doesn't support
> privacy or a reduction in UTXOs.
>
> Before starting this thread, I had completely forgotten that age was even
> a factor in determining which UTXOs to use. Frankly, I can't think of any
> reason why miners care how old a particular UTXO is when determining what
> fees to charge. I'm sure there is one, I just don't know what it is. I just
> tossed it in there as homage to Andreas who pointed out to me that it was
> still part of the selection criteria.
>
>

> 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*
> <https://plus.google.com/u/0/113107039501292625391/posts>
>
> *"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.*

> Minimizing the number of UTXOs in a wallet is sometimes not in the best
> interests of the user. In fact, quite often I've wished for a configuration
> option like "Try to maintain _[number]_ UTXOs in the wallet." This is
> because I often want to make multiple spends from my wallet within one
> block, but spends of unconfirmed inputs are less reliable than spends of
> confirmed inputs, and some wallets (e.g., Andreas Schildbach's wallet)
> don't even allow it - you can only spend confirmed UTXOs. I can't tell you
> how aggravating it is to have to tell a friend, "Oh, oops, I can't pay you
> yet. I have to wait for the last transaction I did to confirm first." All
> the more aggravating because I know, if I have multiple UTXOs in my wallet,
> I can make multiple spends within the same block.
>
>
> On Saturday, 9 May 2015, at 12:09 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*
> > <https://plus.google.com/u/0/113107039501292625391/posts>
> >
> > *"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.*
>

>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*
><https://plus.google.com/u/0/113107039501292625391/posts>
>
>*"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.*
>
>
>!DSPAM:554e4e5450787476022393!
>
>
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>Insights
>Deep dive visibility with transaction tracing using APM Insight.
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> This is my biggest headache with practical bitcoin usage. I'd love to hear
> it if
> anyone has any clever solutions to the wallet/utxo locked problem. Spending
> unconfirmed outputs really requires a different security model on the part
> of
> the receiver than #confirmations, but isn't inherently bad if the receiver
> has a
> better security model and knows how to compute the probability that an
> unconfirmed-spend will get confirmed. Of course the bigger problem is
> wallet
> software that refuses to spend unconfirmed outputs.
>
> I've thought a bit about a fork/merge design: if the change were computed
> by the
> network instead of the submitter, two transactions having the same change
> address and a common input could be straightforwardly merged or split (in a
> reorg), where with bitcoin currently it would be considered a
> double-spend.  Of
> course that 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.
>
> The fact of the matter is that having numerous sequential debits on an
> account
> is an extremely common use case, and bitcoin is obtuse in this respect.
>
> On May 9, 2015 1:09:32 PM EDT, Jim Phillips <jim@ergophobia•org> 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*
> ><https://plus.google.com/u/0/113107039501292625391/posts>
> >
> >*"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.*
> >
> >
> >!DSPAM:554e4e5450787476022393!
> >
> >
> >------------------------------------------------------------------------
> >
>
> >------------------------------------------------------------------------------
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> >Physical-Virtual-Cloud
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> >!DSPAM:554e4e5450787476022393!
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> >
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> >https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >
> >
> >!DSPAM:554e4e5450787476022393!
>
> --
> Sent from my Android device with K-9 Mail. Please excuse my brevity.
>
> This is my biggest headache with practical bitcoin usage. I'd love to hear
> it if anyone has any clever solutions to the wallet/utxo locked problem.
> Spending unconfirmed outputs really requires a different security model on
> the part of the receiver than #confirmations, but isn't inherently bad if
> the receiver has a better security model and knows how to compute the
> probability that an unconfirmed-spend will get confirmed. Of course the
> bigger problem is wallet software that refuses to spend unconfirmed outputs.
>
> I've thought a bit about a fork/merge design: if the change were computed
> by the network instead of the submitter, two transactions having the same
> change address could be straightforwardly merged or split (in a reorg). Of
> course that has big privacy implications and is pretty far from bitcoin's
> design, but is much closer to what people expect of a debit-based "account"
> in traditional banking.
>
> The fact of the matter is that having numerous sequential debits on an
> account is an extremely common use case, and bitcoin is obtuse in this
> respect.
>
> On May 9, 2015 1:09:32 PM EDT, Jim Phillips <jim@ergophobia•org> 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*
>> <https://plus.google.com/u/0/113107039501292625391/posts>
>>
>> *"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.*
>>  !DSPAM:554e4e5450787476022393!
>>
>> ------------------------------
>>
>> 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
>>
>> !DSPAM:554e4e5450787476022393!
>>
>> ------------------------------
>>
>> Bitcoin-development mailing list
>> Bitcoin-development@lists•sourceforge•net
>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>
>>
>> !DSPAM:554e4e5450787476022393!
>>
>>
> --
> Sent from my Android device with K-9 Mail. Please excuse my brevity.
>
> -----BEGIN PGP SIGNATURE-----
> Version: GnuPG v1.4.10 (GNU/Linux)
>
> iEYEARECAAYFAlVPXp0ACgkQjwioWRGe9K1+2ACfViY0D2ksVFe29SwhxbtmNSC3
> TQAAnRoJLI9wW3DQRPqQ7PorKxelC2S2
> =Er51
> -----END PGP SIGNATURE-----
>
>
> ------------------------------------------------------------------------------
> 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.
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> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge•net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>

> This has been frequently explored on IRC.
>
> My general conclusion is "dollar bills" - pick highly common denominations of
> bitcoins.  Aggregate to obtain these denominations, but do not aggregate
> further.
>
> This permits merge avoidance (privacy++), easy coinjoin where many hide in the
> noise (privacy++), wallet dust de-fragmentation, while avoiding the
> over-aggregation problem where you have consolidated down to one output.
>
> Thus a wallet would have several consolidation targets.
>
> Another strategy is simply doubling outputs.  Say you pay 0.1 BTC to
> Starbucks.  Add another 0.1 BTC output to yourself, and a final change output.
> Who can say which output goes to Starbucks?
>
> There are many iterations and trade-offs between fragmentation and privacy.

> 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*
> <https://plus.google.com/u/0/113107039501292625391/posts>
>
> *"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.
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> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge•net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>

>
> some wallets (e.g., Andreas Schildbach's wallet) don't even allow it - you
> can only spend confirmed UTXOs. I can't tell you how aggravating it is to
> have to tell a friend, "Oh, oops, I can't pay you yet. I have to wait for
> the last transaction I did to confirm first." All the more aggravating
> because I know, if I have multiple UTXOs in my wallet, I can make multiple
> spends within the same block.
>

> > some wallets (e.g., Andreas Schildbach's wallet) don't even allow it - you
> > can only spend confirmed UTXOs. I can't tell you how aggravating it is to
> > have to tell a friend, "Oh, oops, I can't pay you yet. I have to wait for
> > the last transaction I did to confirm first." All the more aggravating
> > because I know, if I have multiple UTXOs in my wallet, I can make multiple
> > spends within the same block.
>
> Andreas' wallet hasn't done that for years. Are you repeating this from
> some very old memory or do you actually see this issue in reality?
>
> The only time you're forced to wait for confirmations is when you have an
> unconfirmed inbound transaction, and thus the sender is unknown.

> On Monday, 25 May 2015, at 8:41 pm, Mike Hearn wrote:
>>> some wallets (e.g., Andreas Schildbach's wallet) don't even allow it - you
>>> can only spend confirmed UTXOs. I can't tell you how aggravating it is to
>>> have to tell a friend, "Oh, oops, I can't pay you yet. I have to wait for
>>> the last transaction I did to confirm first." All the more aggravating
>>> because I know, if I have multiple UTXOs in my wallet, I can make multiple
>>> spends within the same block.
>>
>> Andreas' wallet hasn't done that for years. Are you repeating this from
>> some very old memory or do you actually see this issue in reality?
>>
>> The only time you're forced to wait for confirmations is when you have an
>> unconfirmed inbound transaction, and thus the sender is unknown.
>
> I see this behavior all the time. I am using the latest release, as far as I know. Version 4.30.
>
> The same behavior occurs in the Testnet3 variant of the app. Go in there with an empty wallet and receive one payment and wait for it to confirm. Then send a payment and, before it confirms, try to send another one. The wallet won't let you send the second payment. It'll say something like, "You need x.xxxxxx more bitcoins to make this payment." But if you wait for your first payment to confirm, then you'll be able to make the second payment.
>
> If it matters, I configure the app to connect only to my own trusted Bitcoin node, so I only ever have one active connection at most. I notice that outgoing payments never show as "Sent" until they appear in a block, presumably because the app never sees the transaction come in over any connection.

> > I see this behavior all the time. I am using the latest release, as far as I know. Version 4.30.
> >
> > The same behavior occurs in the Testnet3 variant of the app. Go in there with an empty wallet and receive one payment and wait for it to confirm. Then send a payment and, before it confirms, try to send another one. The wallet won't let you send the second payment. It'll say something like, "You need x.xxxxxx more bitcoins to make this payment." But if you wait for your first payment to confirm, then you'll be able to make the second payment.
> >
> > If it matters, I configure the app to connect only to my own trusted Bitcoin node, so I only ever have one active connection at most. I notice that outgoing payments never show as "Sent" until they appear in a block, presumably because the app never sees the transaction come in over any connection.
>
> Yes, that's the issue. Because you're connecting only to one node, you
> don't get any instant confirmations -- due to a Bitcoin protocol
> limitation you can only get them from nodes you don't post the tx to.

>
> If it matters, I configure the app to connect only to my own trusted
> Bitcoin node, so I only ever have one active connection at most.

> Yes, that's the issue. Because you're connecting only to one node, you
> don't get any instant confirmations -- due to a Bitcoin protocol
> limitation you can only get them from nodes you don't post the tx to.

> Wallets are incentivised to do a better job with defragmentation already,
> as if you have lots of tiny UTXOs then your fees end up being huge when
> trying to make a payment.
>
> The reason they largely don't is just one of manpower. Nobody is working on
> it.
>
> As a wallet developer myself, one way I'd like to see this issue be fixed
> by making free transactions more reliable. Then wallets can submit free
> transactions to the network to consolidate UTXOs together, e.g. at night
> when the user is sleeping. They would then fit into whatever space is
> available in the block during periods of low demand, like on Sunday.

> CPFP also solves it just fine.

> On Mon, May 25, 2015 at 10:29:26PM +0200, Andreas Schildbach wrote:
>>> I see this behavior all the time. I am using the latest release, as far as I know. Version 4.30.
>>>
>>> The same behavior occurs in the Testnet3 variant of the app. Go in there with an empty wallet and receive one payment and wait for it to confirm. Then send a payment and, before it confirms, try to send another one. The wallet won't let you send the second payment. It'll say something like, "You need x.xxxxxx more bitcoins to make this payment." But if you wait for your first payment to confirm, then you'll be able to make the second payment.
>>>
>>> If it matters, I configure the app to connect only to my own trusted Bitcoin node, so I only ever have one active connection at most. I notice that outgoing payments never show as "Sent" until they appear in a block, presumably because the app never sees the transaction come in over any connection.
>>
>> Yes, that's the issue. Because you're connecting only to one node, you
>> don't get any instant confirmations -- due to a Bitcoin protocol
>> limitation you can only get them from nodes you don't post the tx to.
>
> Odd, I just tried the above as well - with multiple peers connected -
> and had the exact same problem.

> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
> > CPFP also solves it just fine.
>
> CPFP is a significantly more expensive way of paying fees than RBF,
> particularly for the use-case of defragmenting outputs, with cost
> savings ranging from 30% to 90%
>
>
> Case 1: CPFP vs. RBF for increasing the fee on a single tx
> ----------------------------------------------------------
>
> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
> bytes of txin, 182 bytes total.
>
> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in size.
> I forget to click on the "priority fee" option, so it goes out with the
> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
> creating a new transaction t2 that's 192 bytes in size. I want to pay
> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
> transaction fees.
>
> On the other hand, had I use RBF, my wallet would have simply
> rebroadcast t1 with the change address decreased. The rules require you
> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the new
> fee level, or 218uBTC of fees in total.
>
> Cost savings: 48%
>
>
> Case 2: Paying multiple recipients in succession
> ------------------------------------------------
>
> Suppose that after I pay Alice, I also decide to pay Bob for his hard
> work demonstrating cryptographic protocols. I need to create a new
> transaction t2 spending t1's change address. Normally t2 would be
> another 226 bytes in size, resulting in 226uBTC additional fees.
>
> With RBF on the other hand I can simply double-spend t1 with a
> transaction paying both Alice and Bob. This new transaction is 260 bytes
> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>
> Cost savings: 84%
>
>
> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
> ----------------------------------------------------------------
>
> The above situation gets even worse with multisig. t1 in the multisig
> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
> in fees. With RBF we rewrite t1 with an additional output, resulting in
> a 399 byte transaction, with just 36uBTC in additional fees.
>
> Cost savings: 90%
>
>
> Case 4: Dust defragmentation
> ----------------------------
>
> My wallet has a two transaction outputs that it wants to combine into
> one for the purpose of UTXO defragmentation. It broadcasts transaction
> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>
> Prior to the transaction confirming I find I need to spend those funds
> for a priority transaction at the 1mBTC/KB fee level. This transaction,
> t2a, has one input and two outputs, 226 bytes in size. However it needs
> to pay fees for both transactions at once, resulting in a combined total
> fee of 556uBTC. If this situation happens frequently, defragmenting
> UTXOs is likely to cost more in additional fees than it saves.
>
> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
> sufficiently large to cover my costs I can doublespend t1 with a
> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>
> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>               costs you more than you save
>
> --
> 'peter'[:-1]@petertodd.org
> 0000000000000000134ce6577d4122094479f548b997baf84367eaf0c190bc9f
>
>
> ------------------------------------------------------------------------------
> 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.
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>

> What prevents RBF from being used for fraudulent payment reversals?
>
> Pay 1BTC to Alice for hard goods, then after you receive the goods
> broadcast a double spend of that transaction to pay Alice nothing? Your
> only cost is the higher network fee of the 2nd tx.
>
> Thanks,
> -Danny
>
> On Mon, May 25, 2015 at 5:10 PM, Peter Todd <pete@petertodd•org> wrote:
>
>> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
>> > CPFP also solves it just fine.
>>
>> CPFP is a significantly more expensive way of paying fees than RBF,
>> particularly for the use-case of defragmenting outputs, with cost
>> savings ranging from 30% to 90%
>>
>>
>> Case 1: CPFP vs. RBF for increasing the fee on a single tx
>> ----------------------------------------------------------
>>
>> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
>> bytes of txin, 182 bytes total.
>>
>> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
>> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in size.
>> I forget to click on the "priority fee" option, so it goes out with the
>> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
>> creating a new transaction t2 that's 192 bytes in size. I want to pay
>> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
>> transaction fees.
>>
>> On the other hand, had I use RBF, my wallet would have simply
>> rebroadcast t1 with the change address decreased. The rules require you
>> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the new
>> fee level, or 218uBTC of fees in total.
>>
>> Cost savings: 48%
>>
>>
>> Case 2: Paying multiple recipients in succession
>> ------------------------------------------------
>>
>> Suppose that after I pay Alice, I also decide to pay Bob for his hard
>> work demonstrating cryptographic protocols. I need to create a new
>> transaction t2 spending t1's change address. Normally t2 would be
>> another 226 bytes in size, resulting in 226uBTC additional fees.
>>
>> With RBF on the other hand I can simply double-spend t1 with a
>> transaction paying both Alice and Bob. This new transaction is 260 bytes
>> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
>> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>>
>> Cost savings: 84%
>>
>>
>> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
>> ----------------------------------------------------------------
>>
>> The above situation gets even worse with multisig. t1 in the multisig
>> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
>> in fees. With RBF we rewrite t1 with an additional output, resulting in
>> a 399 byte transaction, with just 36uBTC in additional fees.
>>
>> Cost savings: 90%
>>
>>
>> Case 4: Dust defragmentation
>> ----------------------------
>>
>> My wallet has a two transaction outputs that it wants to combine into
>> one for the purpose of UTXO defragmentation. It broadcasts transaction
>> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>>
>> Prior to the transaction confirming I find I need to spend those funds
>> for a priority transaction at the 1mBTC/KB fee level. This transaction,
>> t2a, has one input and two outputs, 226 bytes in size. However it needs
>> to pay fees for both transactions at once, resulting in a combined total
>> fee of 556uBTC. If this situation happens frequently, defragmenting
>> UTXOs is likely to cost more in additional fees than it saves.
>>
>> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
>> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
>> sufficiently large to cover my costs I can doublespend t1 with a
>> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>>
>> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>>               costs you more than you save
>>
>> --
>> 'peter'[:-1]@petertodd.org
>> 0000000000000000134ce6577d4122094479f548b997baf84367eaf0c190bc9f
>>
>>
>> ------------------------------------------------------------------------------
>> 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
>
>

> What prevents RBF from being used for fraudulent payment reversals?
>
> Pay 1BTC to Alice for hard goods, then after you receive the goods
> broadcast a double spend of that transaction to pay Alice nothing? Your
> only cost is the higher network fee of the 2nd tx.
>
> Thanks,
> -Danny
>
> On Mon, May 25, 2015 at 5:10 PM, Peter Todd <pete@petertodd•org> wrote:
>
>> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
>> > CPFP also solves it just fine.
>>
>> CPFP is a significantly more expensive way of paying fees than RBF,
>> particularly for the use-case of defragmenting outputs, with cost
>> savings ranging from 30% to 90%
>>
>>
>> Case 1: CPFP vs. RBF for increasing the fee on a single tx
>> ----------------------------------------------------------
>>
>> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
>> bytes of txin, 182 bytes total.
>>
>> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
>> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in size.
>> I forget to click on the "priority fee" option, so it goes out with the
>> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
>> creating a new transaction t2 that's 192 bytes in size. I want to pay
>> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
>> transaction fees.
>>
>> On the other hand, had I use RBF, my wallet would have simply
>> rebroadcast t1 with the change address decreased. The rules require you
>> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the new
>> fee level, or 218uBTC of fees in total.
>>
>> Cost savings: 48%
>>
>>
>> Case 2: Paying multiple recipients in succession
>> ------------------------------------------------
>>
>> Suppose that after I pay Alice, I also decide to pay Bob for his hard
>> work demonstrating cryptographic protocols. I need to create a new
>> transaction t2 spending t1's change address. Normally t2 would be
>> another 226 bytes in size, resulting in 226uBTC additional fees.
>>
>> With RBF on the other hand I can simply double-spend t1 with a
>> transaction paying both Alice and Bob. This new transaction is 260 bytes
>> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
>> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>>
>> Cost savings: 84%
>>
>>
>> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
>> ----------------------------------------------------------------
>>
>> The above situation gets even worse with multisig. t1 in the multisig
>> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
>> in fees. With RBF we rewrite t1 with an additional output, resulting in
>> a 399 byte transaction, with just 36uBTC in additional fees.
>>
>> Cost savings: 90%
>>
>>
>> Case 4: Dust defragmentation
>> ----------------------------
>>
>> My wallet has a two transaction outputs that it wants to combine into
>> one for the purpose of UTXO defragmentation. It broadcasts transaction
>> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>>
>> Prior to the transaction confirming I find I need to spend those funds
>> for a priority transaction at the 1mBTC/KB fee level. This transaction,
>> t2a, has one input and two outputs, 226 bytes in size. However it needs
>> to pay fees for both transactions at once, resulting in a combined total
>> fee of 556uBTC. If this situation happens frequently, defragmenting
>> UTXOs is likely to cost more in additional fees than it saves.
>>
>> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
>> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
>> sufficiently large to cover my costs I can doublespend t1 with a
>> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>>
>> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>>               costs you more than you save
>>
>> --
>> 'peter'[:-1]@petertodd.org
>> 0000000000000000134ce6577d4122094479f548b997baf84367eaf0c190bc9f
>>
>>
>> ------------------------------------------------------------------------------
>> 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
>
>

> What prevents RBF from being used for fraudulent payment reversals?
>
> Pay 1BTC to Alice for hard goods, then after you receive the goods broadcast
> a double spend of that transaction to pay Alice nothing? Your only cost is
> the higher network fee of the 2nd tx.
>
> Thanks,
> -Danny
>
> On Mon, May 25, 2015 at 5:10 PM, Peter Todd <pete@petertodd•org> wrote:
>>
>> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
>> > CPFP also solves it just fine.
>>
>> CPFP is a significantly more expensive way of paying fees than RBF,
>> particularly for the use-case of defragmenting outputs, with cost
>> savings ranging from 30% to 90%
>>
>>
>> Case 1: CPFP vs. RBF for increasing the fee on a single tx
>> ----------------------------------------------------------
>>
>> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
>> bytes of txin, 182 bytes total.
>>
>> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
>> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in size.
>> I forget to click on the "priority fee" option, so it goes out with the
>> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
>> creating a new transaction t2 that's 192 bytes in size. I want to pay
>> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
>> transaction fees.
>>
>> On the other hand, had I use RBF, my wallet would have simply
>> rebroadcast t1 with the change address decreased. The rules require you
>> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the new
>> fee level, or 218uBTC of fees in total.
>>
>> Cost savings: 48%
>>
>>
>> Case 2: Paying multiple recipients in succession
>> ------------------------------------------------
>>
>> Suppose that after I pay Alice, I also decide to pay Bob for his hard
>> work demonstrating cryptographic protocols. I need to create a new
>> transaction t2 spending t1's change address. Normally t2 would be
>> another 226 bytes in size, resulting in 226uBTC additional fees.
>>
>> With RBF on the other hand I can simply double-spend t1 with a
>> transaction paying both Alice and Bob. This new transaction is 260 bytes
>> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
>> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>>
>> Cost savings: 84%
>>
>>
>> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
>> ----------------------------------------------------------------
>>
>> The above situation gets even worse with multisig. t1 in the multisig
>> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
>> in fees. With RBF we rewrite t1 with an additional output, resulting in
>> a 399 byte transaction, with just 36uBTC in additional fees.
>>
>> Cost savings: 90%
>>
>>
>> Case 4: Dust defragmentation
>> ----------------------------
>>
>> My wallet has a two transaction outputs that it wants to combine into
>> one for the purpose of UTXO defragmentation. It broadcasts transaction
>> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>>
>> Prior to the transaction confirming I find I need to spend those funds
>> for a priority transaction at the 1mBTC/KB fee level. This transaction,
>> t2a, has one input and two outputs, 226 bytes in size. However it needs
>> to pay fees for both transactions at once, resulting in a combined total
>> fee of 556uBTC. If this situation happens frequently, defragmenting
>> UTXOs is likely to cost more in additional fees than it saves.
>>
>> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
>> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
>> sufficiently large to cover my costs I can doublespend t1 with a
>> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>>
>> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>>               costs you more than you save
>>
>> --
>> 'peter'[:-1]@petertodd.org
>> 0000000000000000134ce6577d4122094479f548b997baf84367eaf0c190bc9f
>>
>>
>> ------------------------------------------------------------------------------
>> 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
>

> What prevents RBF from being used for fraudulent payment reversals?
>
> Pay 1BTC to Alice for hard goods, then after you receive the goods
> broadcast a double spend of that transaction to pay Alice nothing? Your
> only cost is the higher network fee of the 2nd tx.

> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
>> CPFP also solves it just fine.
>
> CPFP is a significantly more expensive way of paying fees than RBF,
> particularly for the use-case of defragmenting outputs, with cost
> savings ranging from 30% to 90%
>
>
> Case 1: CPFP vs. RBF for increasing the fee on a single tx
> ----------------------------------------------------------
>
> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
> bytes of txin, 182 bytes total.
>
> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in
> size.
> I forget to click on the "priority fee" option, so it goes out with the
> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
> creating a new transaction t2 that's 192 bytes in size. I want to pay
> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
> transaction fees.
>
> On the other hand, had I use RBF, my wallet would have simply
> rebroadcast t1 with the change address decreased. The rules require you
> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the
> new
> fee level, or 218uBTC of fees in total.
>
> Cost savings: 48%
>
>
> Case 2: Paying multiple recipients in succession
> ------------------------------------------------
>
> Suppose that after I pay Alice, I also decide to pay Bob for his hard
> work demonstrating cryptographic protocols. I need to create a new
> transaction t2 spending t1's change address. Normally t2 would be
> another 226 bytes in size, resulting in 226uBTC additional fees.
>
> With RBF on the other hand I can simply double-spend t1 with a
> transaction paying both Alice and Bob. This new transaction is 260
> bytes
> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>
> Cost savings: 84%
>
>
> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
> ----------------------------------------------------------------
>
> The above situation gets even worse with multisig. t1 in the multisig
> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
> in fees. With RBF we rewrite t1 with an additional output, resulting in
> a 399 byte transaction, with just 36uBTC in additional fees.
>
> Cost savings: 90%
>
>
> Case 4: Dust defragmentation
> ----------------------------
>
> My wallet has a two transaction outputs that it wants to combine into
> one for the purpose of UTXO defragmentation. It broadcasts transaction
> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>
> Prior to the transaction confirming I find I need to spend those funds
> for a priority transaction at the 1mBTC/KB fee level. This transaction,
> t2a, has one input and two outputs, 226 bytes in size. However it needs
> to pay fees for both transactions at once, resulting in a combined
> total
> fee of 556uBTC. If this situation happens frequently, defragmenting
> UTXOs is likely to cost more in additional fees than it saves.
>
> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
> sufficiently large to cover my costs I can doublespend t1 with a
> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>
> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>               costs you more than you save
>
> ------------------------------------------------------------------------------
> 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

> You're the Chief Scientist of __ViaCoin__ a alt with 30 second blocks
> and you have big banks as clients. Shit like replace-by-fee and leading
> the anti-scaling mob is for your clients, not Bitcoin. Get the fuck out.
>
> Peter Todd - 8930511 Canada Ltd.
> 1214-1423 Mississauga Valley Blvd.
> Mississauga ON L5A 4A5
> Canada
>
>
> https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpDtls.html?corpId=8930511
>
> On 2015-05-26 00:10, Peter Todd wrote:
> > On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
> >> CPFP also solves it just fine.
> >
> > CPFP is a significantly more expensive way of paying fees than RBF,
> > particularly for the use-case of defragmenting outputs, with cost
> > savings ranging from 30% to 90%
> >
> >
> > Case 1: CPFP vs. RBF for increasing the fee on a single tx
> > ----------------------------------------------------------
> >
> > Creating an spending a P2PKH output uses 34 bytes of txout, and 148
> > bytes of txin, 182 bytes total.
> >
> > Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
> > Alice. This results in a 1in/2out transaction t1 that's 226 bytes in
> > size.
> > I forget to click on the "priority fee" option, so it goes out with the
> > minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
> > creating a new transaction t2 that's 192 bytes in size. I want to pay
> > 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
> > transaction fees.
> >
> > On the other hand, had I use RBF, my wallet would have simply
> > rebroadcast t1 with the change address decreased. The rules require you
> > to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the
> > new
> > fee level, or 218uBTC of fees in total.
> >
> > Cost savings: 48%
> >
> >
> > Case 2: Paying multiple recipients in succession
> > ------------------------------------------------
> >
> > Suppose that after I pay Alice, I also decide to pay Bob for his hard
> > work demonstrating cryptographic protocols. I need to create a new
> > transaction t2 spending t1's change address. Normally t2 would be
> > another 226 bytes in size, resulting in 226uBTC additional fees.
> >
> > With RBF on the other hand I can simply double-spend t1 with a
> > transaction paying both Alice and Bob. This new transaction is 260
> > bytes
> > in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
> > consumed broadcasting it, resulting in an additional 36uBTC of fees.
> >
> > Cost savings: 84%
> >
> >
> > Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
> > ----------------------------------------------------------------
> >
> > The above situation gets even worse with multisig. t1 in the multisig
> > case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
> > in fees. With RBF we rewrite t1 with an additional output, resulting in
> > a 399 byte transaction, with just 36uBTC in additional fees.
> >
> > Cost savings: 90%
> >
> >
> > Case 4: Dust defragmentation
> > ----------------------------
> >
> > My wallet has a two transaction outputs that it wants to combine into
> > one for the purpose of UTXO defragmentation. It broadcasts transaction
> > t1 with two inputs and one output, size 340 bytes, paying zero fees.
> >
> > Prior to the transaction confirming I find I need to spend those funds
> > for a priority transaction at the 1mBTC/KB fee level. This transaction,
> > t2a, has one input and two outputs, 226 bytes in size. However it needs
> > to pay fees for both transactions at once, resulting in a combined
> > total
> > fee of 556uBTC. If this situation happens frequently, defragmenting
> > UTXOs is likely to cost more in additional fees than it saves.
> >
> > With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
> > bytes in size, paying 374uBTC. Even better, if one of the two inputs is
> > sufficiently large to cover my costs I can doublespend t1 with a
> > 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
> >
> > Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
> >               costs you more than you save
> >
> >
> ------------------------------------------------------------------------------
> > 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
>
>
> ------------------------------------------------------------------------------
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge•net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>

> You're the Chief Scientist of __ViaCoin__ a alt with 30 second blocks
> and you have big banks as clients. Shit like replace-by-fee and leading
> the anti-scaling mob is for your clients, not Bitcoin. Get the fuck out.
>
> Peter Todd - 8930511 Canada Ltd.
> 1214-1423 Mississauga Valley Blvd.
> Mississauga ON L5A 4A5
> Canada
>
> https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpDtls.html?corpId=8930511
>
> On 2015-05-26 00:10, Peter Todd wrote:
>> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
>>> CPFP also solves it just fine.
>>
>> CPFP is a significantly more expensive way of paying fees than RBF,
>> particularly for the use-case of defragmenting outputs, with cost
>> savings ranging from 30% to 90%
>>
>>
>> Case 1: CPFP vs. RBF for increasing the fee on a single tx
>> ----------------------------------------------------------
>>
>> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
>> bytes of txin, 182 bytes total.
>>
>> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
>> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in
>> size.
>> I forget to click on the "priority fee" option, so it goes out with the
>> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
>> creating a new transaction t2 that's 192 bytes in size. I want to pay
>> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
>> transaction fees.
>>
>> On the other hand, had I use RBF, my wallet would have simply
>> rebroadcast t1 with the change address decreased. The rules require you
>> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the
>> new
>> fee level, or 218uBTC of fees in total.
>>
>> Cost savings: 48%
>>
>>
>> Case 2: Paying multiple recipients in succession
>> ------------------------------------------------
>>
>> Suppose that after I pay Alice, I also decide to pay Bob for his hard
>> work demonstrating cryptographic protocols. I need to create a new
>> transaction t2 spending t1's change address. Normally t2 would be
>> another 226 bytes in size, resulting in 226uBTC additional fees.
>>
>> With RBF on the other hand I can simply double-spend t1 with a
>> transaction paying both Alice and Bob. This new transaction is 260
>> bytes
>> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
>> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>>
>> Cost savings: 84%
>>
>>
>> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
>> ----------------------------------------------------------------
>>
>> The above situation gets even worse with multisig. t1 in the multisig
>> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
>> in fees. With RBF we rewrite t1 with an additional output, resulting in
>> a 399 byte transaction, with just 36uBTC in additional fees.
>>
>> Cost savings: 90%
>>
>>
>> Case 4: Dust defragmentation
>> ----------------------------
>>
>> My wallet has a two transaction outputs that it wants to combine into
>> one for the purpose of UTXO defragmentation. It broadcasts transaction
>> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>>
>> Prior to the transaction confirming I find I need to spend those funds
>> for a priority transaction at the 1mBTC/KB fee level. This transaction,
>> t2a, has one input and two outputs, 226 bytes in size. However it needs
>> to pay fees for both transactions at once, resulting in a combined
>> total
>> fee of 556uBTC. If this situation happens frequently, defragmenting
>> UTXOs is likely to cost more in additional fees than it saves.
>>
>> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
>> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
>> sufficiently large to cover my costs I can doublespend t1 with a
>> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>>
>> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>>               costs you more than you save
>>
>> ------------------------------------------------------------------------------
>> 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
>
> ------------------------------------------------------------------------------
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge•net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>

> What is wrong with the man testing some ideas on his custom branch? This
> is how improvements come to life. I saw in the BIPs some really
> interesting ideas and nice brainstorming which came from Peter Todd.
>
> Now, my question, if replace by fee doesn't allow me to change the
> inputs or the outputs, I can only add outputs... what can I do with this
> feature? If I sent a tx and want to replace it with a higher fee one,
> the higher fee one can only have maybe additional change addresses or
> another payment, if the inputs suffice? Do we have any real use cases?
>
> P.S. is it planned to include this by default in bitcoin core 10.0.3 or
> it will remain just on Peter's branch?
>
> On 5/26/2015 11:30 PM, joliver@airmail•cc wrote:
>> You're the Chief Scientist of __ViaCoin__ a alt with 30 second blocks
>> and you have big banks as clients. Shit like replace-by-fee and leading
>> the anti-scaling mob is for your clients, not Bitcoin. Get the fuck out.
>>
>> Peter Todd - 8930511 Canada Ltd.
>> 1214-1423 Mississauga Valley Blvd.
>> Mississauga ON L5A 4A5
>> Canada
>>
>> https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpDtls.html?corpId=8930511
>>
>> On 2015-05-26 00:10, Peter Todd wrote:
>>> On Tue, May 26, 2015 at 12:03:09AM +0200, Mike Hearn wrote:
>>>> CPFP also solves it just fine.
>>>
>>> CPFP is a significantly more expensive way of paying fees than RBF,
>>> particularly for the use-case of defragmenting outputs, with cost
>>> savings ranging from 30% to 90%
>>>
>>>
>>> Case 1: CPFP vs. RBF for increasing the fee on a single tx
>>> ----------------------------------------------------------
>>>
>>> Creating an spending a P2PKH output uses 34 bytes of txout, and 148
>>> bytes of txin, 182 bytes total.
>>>
>>> Let's suppose I have a 1 BTC P2PKH output and I want to pay 0.1 BTC to
>>> Alice. This results in a 1in/2out transaction t1 that's 226 bytes in
>>> size.
>>> I forget to click on the "priority fee" option, so it goes out with the
>>> minimum fee of 2.26uBTC. Whoops! I use CPFP to spend that output,
>>> creating a new transaction t2 that's 192 bytes in size. I want to pay
>>> 1mBTC/KB for a fast confirmation, so I'm now paying 418uBTC of
>>> transaction fees.
>>>
>>> On the other hand, had I use RBF, my wallet would have simply
>>> rebroadcast t1 with the change address decreased. The rules require you
>>> to pay 2.26uBTC for the bandwidth consumed broadcasting it, plus the
>>> new
>>> fee level, or 218uBTC of fees in total.
>>>
>>> Cost savings: 48%
>>>
>>>
>>> Case 2: Paying multiple recipients in succession
>>> ------------------------------------------------
>>>
>>> Suppose that after I pay Alice, I also decide to pay Bob for his hard
>>> work demonstrating cryptographic protocols. I need to create a new
>>> transaction t2 spending t1's change address. Normally t2 would be
>>> another 226 bytes in size, resulting in 226uBTC additional fees.
>>>
>>> With RBF on the other hand I can simply double-spend t1 with a
>>> transaction paying both Alice and Bob. This new transaction is 260
>>> bytes
>>> in size. I have to pay 2.6uBTC additional fees to pay for the bandwidth
>>> consumed broadcasting it, resulting in an additional 36uBTC of fees.
>>>
>>> Cost savings: 84%
>>>
>>>
>>> Case 3: Paying multiple recipients from a 2-of-3 multisig wallet
>>> ----------------------------------------------------------------
>>>
>>> The above situation gets even worse with multisig. t1 in the multisig
>>> case is 367 bytes; t2 another 367 bytes, costing an additional 367uBTC
>>> in fees. With RBF we rewrite t1 with an additional output, resulting in
>>> a 399 byte transaction, with just 36uBTC in additional fees.
>>>
>>> Cost savings: 90%
>>>
>>>
>>> Case 4: Dust defragmentation
>>> ----------------------------
>>>
>>> My wallet has a two transaction outputs that it wants to combine into
>>> one for the purpose of UTXO defragmentation. It broadcasts transaction
>>> t1 with two inputs and one output, size 340 bytes, paying zero fees.
>>>
>>> Prior to the transaction confirming I find I need to spend those funds
>>> for a priority transaction at the 1mBTC/KB fee level. This transaction,
>>> t2a, has one input and two outputs, 226 bytes in size. However it needs
>>> to pay fees for both transactions at once, resulting in a combined
>>> total
>>> fee of 556uBTC. If this situation happens frequently, defragmenting
>>> UTXOs is likely to cost more in additional fees than it saves.
>>>
>>> With RBF I'd simply doublespend t1 with a 2-in-2-out transaction 374
>>> bytes in size, paying 374uBTC. Even better, if one of the two inputs is
>>> sufficiently large to cover my costs I can doublespend t1 with a
>>> 1-in-2-out tx just 226 bytes in size, paying 226uBTC.
>>>
>>> Cost savings: 32% to 59%, or even infinite if defragmentation w/o RBF
>>>               costs you more than you save
>>>
>>> ------------------------------------------------------------------------------
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>>>
>>> _______________________________________________
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>>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>
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>
> ------------------------------------------------------------------------------
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> You're the Chief Scientist of __ViaCoin__ a alt with 30 second blocks
> and you have big banks as clients. Shit like replace-by-fee and leading
> the anti-scaling mob is for your clients, not Bitcoin. Get the fuck out.
> <https://lists.sourceforge.net/lists/listinfo/bitcoin-development>
>

> What is wrong with the man testing some ideas on his custom branch? This
> is how improvements come to life. I saw in the BIPs some really
> interesting ideas and nice brainstorming which came from Peter Todd.
>
> Now, my question, if replace by fee doesn't allow me to change the
> inputs or the outputs, I can only add outputs... what can I do with this
> feature? If I sent a tx and want to replace it with a higher fee one,
> the higher fee one can only have maybe additional change addresses or
> another payment, if the inputs suffice? Do we have any real use cases?

> P.S. is it planned to include this by default in bitcoin core 10.0.3 or
> it will remain just on Peter's branch?

> On Wed, May 27, 2015 at 12:29:28AM +0300, s7r wrote:
>> What is wrong with the man testing some ideas on his custom branch? This
>> is how improvements come to life. I saw in the BIPs some really
>> interesting ideas and nice brainstorming which came from Peter Todd.
>>
>> Now, my question, if replace by fee doesn't allow me to change the
>> inputs or the outputs, I can only add outputs... what can I do with this
>> feature? If I sent a tx and want to replace it with a higher fee one,
>> the higher fee one can only have maybe additional change addresses or
>> another payment, if the inputs suffice? Do we have any real use cases?
>
> You're a bit mistaken there: standard RBF lets you change anything, and
> FSS RBF lets you modify inputs and add outputs and/or make the value of
> outputs higher.
>
>> P.S. is it planned to include this by default in bitcoin core 10.0.3 or
>> it will remain just on Peter's branch?
>
> Any significant change to mempool policy like RBF is very unlikely to be
> incorporated in the Bitcoin Core v0.10.x branch, simply because it'd be
> too large a change for a minor, mostly bugfix, release.
>
> Having said that, I already maintain a standard RBF branch for v0.10.x,
> and have been asked by a major minor to backport FSS RBF for v0.10.x as
> well.
>