Topic: [Aug 2022] Mempool empty! Use this opportunity to Consolidate your small inputs! - page 38. (Read 88546 times)

I can confirm a few days ago I sent some satoshis with 1 sat per byte mining fee and the transaction went trough for just a couple of hours, let's say half a day. 

All with 2 outputs, one of them sending 1000 sat to 3CXG4C4gSuGUaMi4UZ7PFAxZwP9Pxo618B. Any guess why they would do that?

It's something normal, spikes like those happen all the time.
Casinos, exchanges, mixers, merchants at one point have to collect all those funds and consolidate them in order to make payouts, but yeah this one was a big one.

Anyhow, here is your culprit:
https://blockchair.com/bitcoin/address/373GifzHRGRBALbtxHNhhQpZ9DqGuet4Dh
about 50 tx with 1000 inputs at around 1-2 sat/b

Probably
That's a consolidation for ants, I've seen much bigger ones.

A question from a dummie.

I've seen pending transactions increase a lot in the last couple of hours:



(source: mempool.space)

Do you think this is a casino or an exchange consolidating a lot of inputs or is it due to some other reason?

to spend bitcoin you do not necessarily need to send using mainnet network, there are many other ways:

• Side chains and lightning network: current network capacity is 2,475.21 BTC and there are a lot of side networks. source: https://1ml.com/
• Wrapped Bitcoin (WBTC): ERC-20 token that represents Bitcoin on the Ethereum blockchain.
• Central exchange and Central Payment Methods: Binance exchange and binance pay services, .............
• SegWit, Schnorr, Taproot, and Graftroot

I can think of more reasons.

It has both increased and decreased.

You see shitcoins such as Ethereum depends on hype, and whenever there is a hype going on (eg. ICO scam hype, IEO scam hype, STO, .... and finally these days DeFi scam hype) the number of gamblers increase so they make more transactions. But as each of these hypes slowly die, the number of transactions decrease too.
For example the first peak started with ICO hype and ended in first quarter of 2018 as the ICO hype was dying and (ETH price was dumping hard), the number of transactions also had a nose dive.
The next peak is in mid 2019, exactly when ICO scams restarts with a different name called IEO which only lasts 3 months before popping. You see the same rise and fall on tx count chart.
And so on...
The last one was the end of 2020 when they started a new ICO scam called DeFi, we see another peak in number of transactions bets people make on these scams. The latest bubble that has been bursting in the second half of 2021.

Of course another major reason for tx peak on shitcoins is also their price pump and dumps.

Another major reason is moving some bitcoin tokens to these shitcoin platforms. For example USDT which was a token built on top of bitcoin and didn't exist anywhere else started moving to Ethereum platform and took with it a lot of spam in bitcoin network. Consequently the number of ETH transactions grew while bitcoin spam decreased. But also as ETH transaction fees shoot up (peaked at $70) those projects moved elsewhere hence decreasing the number of ETH transactions.

And little did they know that the cost was only lower because of lack of usage and it actually went up a lot more than bitcoin as those alternatives gained some traction. They also found out that the lower cost was also coming with lower security.

Mempool is empty because there are less transactions, not the other way around.

If the mempool is empty, then bitcoin is used less.
This trend has been going on for some time and has not changed yet.
But in other cryptocurrencies, for example, Ethereum, the number of transactions does not decrease.
When the cost of transactions in bitcoin was high, people looked for a cheap alternative, but when the cost fell to an acceptable level, they began to use less.
Who has any thoughts on this?

No mixer is guaranteed to have no link between the deposit and withdrawal addresses. The link between input and output transactions has been broken for many mixers.

If you are consolidating your coin, the output from the mixer will ultimately be combined into a single address. You could have the mixer send you a single transaction to a single address, or you could have the mixer send you two (or more) transactions to two (or more) addresses. If you instruct the mixer to do the later, you would end up combining inputs from the two addresses anyway.

Yes, this sounds good to me!

How so? Isn't this what the mixing service is made for? To remove links between inputs and outputs?
From the view of the blockchain, I'd expect a mixer that takes multiple inputs on multiple addresses and sends me back the total to like 2 different addresses, to do it in a way that no trace is visible.

In some cases, yes:

My opinion: it depends Consolidating many small inputs at once already links many of your previous transactions together. Mixing the one remaining input doesn't change that.
But in many cases it doesn't really matter: I don't mind if Exchange A can see I also deal with Exchanges B and C, but you may not want your local drug dealer to know that you just bought a jet the other day.

My advice: use coin control, and manually choose which inputs you use for each transaction you make.

I wish But even if I'd bother the campaign manager every week, there'd still be a spreadsheet that shows all addresses for years to come.

I would not do so. A very good explanation on why consolidating dust is a very bad idea is here, from Wasabi's Docs. While of course these remaining coins might add up to at least a few bucks in the long term which only might become valuable within years/decades, if you care about privacy it might be a better idea to in fact not consolidate change.

Best you can do is keep using the same seed over the years, lock down/hide dust and if Bitcoin ever becomes expensive enough, it might be more worth it to consolidate/spend them at the expense of privacy which again I doubt, at least in my case ... because the only thing that hurts your privacy more than anything imo is consolidating dust and linking all your previous txs to a single wallet. This makes it easy for a perpetrator to understand how many coins you had and how you spent them.

If change worth $1, $2... damn, even $10 or $50 in total is going to become worth a ton of money over the years, then from a privacy perspective it would be a much better idea right now to simply purchase the same amount of BTC and keep it over the long term. The point I'm trying to make is, if privacy is important to you now then I see absolutely no reason to trade it off in the future for a sum of money. It's literally as if you sold your privacy for money. It gets worse: if you care about the privacy of your txs today, then by consolidating dust you will in fact expose your entire history including the transactions you make today.

Last but not least.. If your $10 in change will become a lot of money in the future, I would safely assume that you would have enough money by then to not care about the change anymore.

Yes, but in a practical way: do you change your address every time you receive a payment from the sig campaign?

You can receive several payments in one direction, and if you want privacy, you pass it through a mixer. It sounds to me that o_e_l_e_o said he does that with the payments he receives.

Another thing: if you have small inputs but you are going to hold them for the very long term, do you think it might not be necessary to consolidate them? I got the idea from this:


Let's suppose you have two wallets, one that is for very long term hold (minimum two cycles) and one that is for expenses. If Bitcoin price rises as many of us expect it to in two cycles, it may not be worth consolidating the small inputs now. Although we would have to see if the fees go up proportionally as well.

What do you think?

Edit: after seeing pooya87's comment on that thread, it seems that swiftxi did not have a very clear concept of what dust is.

If you sent me three transactions to the same address, an observer would, at a minimum, know that I own the sum of the transaction amounts received from you.

If I asked you to send the transactions to unique, and unused addresses each time you were due to send me coin, an observer would only know that addresses "a", "b", and "c" had received a particular amount of coin. Depending on your privacy practices, an observer may, or may not know the coin was sent by the same person.

You are correct that consolidating three outputs all sent to the same address will not further reduce privacy, but that is because privacy has already been incrementally reduced via the address reuse.

Not necessarily.
Imagine if you and I had a private deal and you gave me your address and I sent you 3 payments on 3 different occasions. As far as the rest of the world knows an arbitrary address received coins from 1 to 3 [sending] addresses but they don't know if that address belongs to you. Consolidating those 3 outputs doesn't change that either.

If you have reused addresses, you have already negatively affected your privacy.

Yes, one "cost" of consolidating unspent outputs is a reduction in privacy. This should be considered when deciding if you want to consolidate your unspent outputs. The value of privacy is not infinite.

I don't think consolidating unspent outputs and subsequently mixing the resulting coin would provide much privacy benefit. When you consolidate unspent outputs from two previously unconnected addresses, an observer would know that the two addresses likely belong to the same entity. Mixing your consolidated coin does not change this fact. If you want to maintain your privacy, you will need to move your unspent outputs through a mixer before you consolidate your unspent outputs, or you could send your coin to multiple deposit addresses to a mixer, and have the mixer send you a single output. If you engage in the above, an observer may still be able to draw a link between the inputs and outputs in the mixing service. You will also need to trust the mixing service to not log, nor intentionally leak information about their customers.

It does when the outputs being spent are coming from different addresses. But sometimes (due to address reuse) all the transaction outputs are from the same address, like when people keep receiving payments in one address.

To improve privacy you can use a mixing technique, that too will benefit from the lower [network] fees. However if you consolidate first that will link the previously unconnected addresses together which may not be desirable.

Doesn't consolidating hurt privacy? Maybe consolidate, then mix? What's your opinion on this?

If fees are very high, you can opt to either send more to the recipient than they are owed, or to pay a higher fee than necessary, if that means avoiding having some coin sent to a change address, and the additional amount you are paying is less than the additional fee you would have paid if coin was sent to a change address.