How value is tracked.
WHAT AN UNSPENT OUTPUT IS
A discrete amount received, spendable as a whole.
HOW A TRANSACTION WORKS
It consumes existing outputs entirely, and creates new ones.
WHAT CHANGE IS
An output back to yourself, for the remainder.
WHY THAT SURPRISES PEOPLE
There are no balances; a balance is the sum of your unspent outputs.
WHAT DETERMINES TRANSACTION SIZE
The number of inputs and outputs, not the amount.
WHY THAT MATTERS
Fees depend on size, so consolidating many small outputs is expensive.
WHAT DUST IS
Outputs so small that spending them costs more than they hold.
WHAT TO AVOID
Accumulating many tiny outputs.
WHAT SCRIPTS DEFINE
The conditions under which an output can be spent.
WHAT THAT ENABLES
Multi-signature requirements Time locks Simple conditional spending
WHAT IT DELIBERATELY DOES NOT ENABLE
Arbitrary computation.
WHY
Simplicity reduces the ways it can fail.
WHAT ADDRESS TYPES DIFFER IN
Transaction size, and therefore fees.
WHAT TO USE
Current formats, which are cheaper.
WHAT PRIVACY IMPLICATIONS EXIST
Combining outputs in one transaction links them as belonging to one owner.
