Dmitry Petukhov presents a different approach to the UTXO consolidation problem called Organic Consolidation.
For UTXO-based cryptocurrencies, it is important to have the set of managed Unspent Transaction Outputs in optimal shape, because if you have too much small UTXO, you will have to create bigger transactions to send the same amount of funds, and hence pay bigger network fee, or even need to send several transactions to transfer the needed amount.
Typical approach to handle this is to do periodical sweep of UTXO, bundling them all together, at the time when network fee is low.
We implemented another approach, that does not require manual UTXO consolidation, and at the same time, conserves network fee - when fee in the network is high, the algorithm tries to use less UTXO per transaction, and when network fee is low, it will create bigger transaction, effectively performing UTXO consolidation along with regular payments. This organic UTXO consolidation allows to maintain healthy UTXO set automatically, without manual consolidation runs.
Content originally published by BitcoinOptech on newsletter #16.
The fifth Scaling Bitcoin conference was held Saturday and Sunday in Tokyo, Japan. In the sections below, we provide brief overviews to some of the talks we think might be most interesting to this newsletter’s readers, but we also recommend watching the complete set of videos provided by the workshop organizers or reading the transcripts provided by Bryan Bishop.
For instance if \(p\) is the peak hash rate for 365 periods or 1 year, made up of 144 blocks, \(h\) the hash rate of the last 144 blocks (1 day period), and \(r\) the base subsidy or reward for mining a block, which is currently 12.5 bitcoin, the maximum block reward can then be calculated using the formula \(0.5r (1 + h/p)\) , the lowest possible block reward being \(0.5r\) . At peak hashrate, the miner gets the full 12.5 BTC reward, otherwise the reward is determined based on the hashrate.
One of the main features intended for Bitcoin in the future is a native support for multisig payments and coinjoins, they are currently supported by the Blockchain but not in a native way and as such they do not have as much efficiency and privacy as desired. This is going to be the main focus of the next major update in Bitcoin, changing the signature scheme to Schnorr Signatures.
As a simplified alternative to Pay-to-Endpoint (P2EP - Pay-to-Endpoint), developer Ryan Havar proposed a BIP for a new coinjoins protocol that does not need changes to the current Bitcoin consensus and provides a simple, practical way to make coinjoin transactions that are indistinguishable from normal ones.