Discussion on open Coin Selection matters

Date: September 19, 2023

Transcript By:

Tags: Bitcoin core, Coin selection

Category: Core dev tech

Topic: review of https://github.com/bitcoin/bitcoin/pull/27601
- Problem statement: when doing manual RBF (without using bumpfee RPC) we treat previous change output as a receiver and thus create two outputs to the same address
- Proposal: combine amount on outputs to the same address
- What are valid use-cases for having the same address for change and output?
  - Consolidation with payment
    - Alternative: Use sendall with two outputs one with an amount and yours without an amount
  - Payment and send at least X to yourself
  - Consolidate with automatic coin selection of at least X
    - Alternative: Implement “Send at least” as a separate and explicitly feature
- Consider just giving an error if change destination is the same with one of the outputs
  - Should we do the enforcement only at RPC level?
    - No, because this is risky
- We don’t want to fix manual RBF, because we have bumpfee RPC
  - Maybe you can also take original TX and give to fundrawtransaction
Topic: https://github.com/bitcoin/bitcoin/pull/26732
- CreateTransactionInternal should remove UTXOs conflicting with preselected
Topic: Where do we make change decisions? During tx building or coin selection?
- Whether we create change, how big it is and the type
- We determine the size of the change twice
  - One time to feed into coinselection
  - Second time when we do the actual tx building
- One approach is to let coinselection pick change type
- Conclusion so far: Status quo remains
Topic: Bug when BnB produce change https://github.com/bitcoin/bitcoin/issues/28180
- Min_viable_change is different from cost_of_change and it doesn’t include change_fee * Zeroing out coins selection params for SFFO is bad
  - We need to fix change_fee
- One solution: Reduce upper bound for BnB when SFFO
- Another solution: disable BnB and exact knapsack when user requested SFFO
- SFFO use cases are still unclear
Topic: Coin grinder algorithm
- Find a solutions with minimum weight and always creating change
- Differences from BnB
  - when fee rate is lower than LTFR
  - Always find a solutions because we have change
- Why lower first?
  - To minimize liquidity in flight
- How to avoid grinding it to very small UTXO set
  - Only use it at high fee rates
  - Use multiple of LTFR
- Next steps: Run the simulations
Topic: Knapsack removal
- Useful because consolidatory
- Need more research on changeless solutions not found by BnB
- CoinGrinder replaces lowest larger
- Garbage collection for negative effective value