We've improved how bitcoin transactions are authored on the Unchained platform to reduce the average fees for vault and loan clients!
To withdraw bitcoin out of a wallet, the wallet software includes information such as what transactions the bitcoin is coming from (inputs) and where the bitcoin is going (outputs) as it creates a transaction.
Users get to choose a destination address and the amount to send to that address (the output). However, the inputs to the transaction are determined by which UTXOs are selected to be spent from the wallet, which can be done manually by the user or automatically by the wallet software.
Bitcoin beginners typically prefer an automatic selection, to avoid extra decisions that may not be fully understood. Advanced bitcoin users might prefer manual selection to obtain additional control over transaction fees and privacy.
With an Unchained vault, either method is available. If a transaction is constructed in Unchained, the inputs for the transaction are automatically selected. If an advanced user wants to manually select how the transaction is created, they can do so by loading their vault into an external multisig tool, such as Caravan.
We enhanced the way the Unchained platform automatically authors transactions to strike a balance between choosing too many, and too few inputs of bitcoin.
This can benefit you in a few ways:
The tradeoff with the new method of automated transaction authoring is that when withdrawing a large portion of your bitcoin, such as the full balance, transaction fees may become a bit higher on average. Luckily, this can be avoided by learning about how UTXOs affect fees, and then occasionally performing UTXO consolidations when it makes strategic sense.
If you are someone who already has experience with UTXO consolidations, it’s important to note that the consolidation process in your Unchained vault has changed. Simply conducting a small withdrawal will no longer consolidate your UTXOs. Instead, you will need to follow the instructions outlined here.
Our team of experts is happy to provide education on UTXO management when you sign up for a Premium Support session. No matter your experience level, we will answer all of your questions about UTXOs, and help you create a personalized plan for maintaining good vault hygiene.
