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Note that the transaction sizes, in most cases, do not represent amounts of money moving between parties. The reason for this is because of how Bitcoin transact
by jimrandomh 9y ago
Note that the transaction sizes, in most cases, do not represent amounts of money moving between parties. The reason for this is because of how Bitcoin transactions are structured. Suppose you have 5.0BTC at an address, and you want to send 0.1BTC to someone else. The transaction that gets recorded to the blockchain has an input of 5.0BTC, an output of 0.1BTC going to the recipient, and an output of 4.9BTC going to a "change address" which is also yours. But if you don't know anything about the addresses then there's no way to tell, by looking at the blockchain, which address is the recipient and which is the change.
(Also, the very biggest transactions represent exchanges and other deposit-holding institutions moving coins from new deposits to cold storage and from cold storage to their hot wallets to service withdrawals.)
- g09980 9y agoDid not know this. Is there a technical reason it works like this? In Ethereum, for example, if you're sending 0.1 ETH, you will just send that amount (no change address).
- masonicb00m 9y agoThis design makes it simple to prevent double spending. You just check that the transaction inputs are in the set of unspent transactions (UTXOs).
- jimrandomh 9y agoIt gives better anonymity that way. If unspent change went back to the same address, people would be more inclined to reuse the same address over time, which makes it easier for someone looking at the blockchain to identify who's paying who.