Homework on UTXO vs Account Model

Ethereum 101
#3591

1 -The account model doesn’t require much space as the UTXO model, why is that a benefit?

Unlike bitcoin, which due to its UTXO Input-Output model requires a certain amount of space, ETH does not list and analyze its inputs and outputs as meticulously as Bitcoin. Eth is based on a global accounting balance of the balance operating at +1, -1 in principle. If I have 10 ETH and send 2, I will have 8 left without sub-accounts from the various previous transactions making up my balance as is the case for Bitcoin.

Thus the operating model of the space and the size of the blocks differs fundamentally from bitcoin, and one could think that ETH has a block size much greater than BTC, and therefore, can include a number of transactions. much larger than on BTC 1000 to 2500-3000. And this is true because BTC makes an average of 7 transactions per second compared to 13 to 16 for ETH.

However, ETH block transactions are not calculated in bytes like bitcoin but in terms of gas. Each transaction has an initial cost of 21,000 gases, this increases considerably depending on the operational complexity of the transactions, for example via the interaction of multiple smart contracts on the challenge. The size of the blocks were recently fixed at an extensibility of up to 15 million gases per block with the EIP 1559. Gas should not be confused as being the fixed unit cost of each transaction, namely 21,000 gases, and the gas fees which it is dynamic and variable and is calculated in GWEI (Giga Wei) or 1 ETH = 1 billion
of WEI or 1GWEI.

If we stick to the fixed gas without the dynamic gas fee, we can estimate that with a maximum today of 15 million gas / block we could make 700 transactions per block, today every 16 seconds.

The gas fees correspond to the price of the initial gas * by the price of the fixed surplus of gas necessary for the routing of the transaction and according to the temporality that one chooses as well as of the congestion or not of the network within the mempool. ETH. So if we choose to pay a fixed cost of 21,000 gas * per 30 GWEI (or 30 billion WEI) = 30 * 21,000 = 630,000 GWEI of costs.

Thus, the size of the transactions at a fixed cost and dynamic fees means that the sizes of the transactions are highly variable from one transaction to another.

Two parameters to understand in this structural gas price incentive:

A - If the price of ETH increases the price of gas decreases and vice versa.

B - If the overall demand for transactions is strong on the network, the price of gas increases and vice versa.

2 -How is the account model not as great as the UTXO model for privacy?

The ETH account model is not as efficient as that of BTC because the latter is unitarily more fungible than BTC which is not, because of the hyper traceability of the UTXO input-output model, because each input transaction corresponds to an output. In addition, the overall balance of an issuer breaks down into multiple unrealized expenses resulting from multiple previous transactions. This makes bitcoin much more traceable and therefore much more fungible. An ether, from a unit point of view is always equal to another ether, while for Bitcoin we can distinguish a legal bitcoin from a bitcoin having been used for purchases or more dubious uses.

However ETH, is much less confidential than BTC, the reason is that with bitcoin and its model of UTXO, allows that we can with certain specific functionality integrate several entries and several exits, or the entries come from different portfolios. and the outputs go to different wallets that can be the same.

Likewise when we make a single entry and exit, part of the transaction is returned to us as an unspent exit if we do not use all of our assets. We can better dissected the transactional origin but less well attached to a particular address knowing that with each transaction the return of the unspent part of our output goes to a new public key normally derived from the same public key . While this is not possible on ETH which does not perform a return but just a count of the current global balance of an already existing public key and from which the sent transaction is subtracted, there is therefore no derivation of the public key via the application of the UTXO model, but just a digital count from an existing public key after the transaction is signed.

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#3592

  1. Transactions requiring less space means they can be processed faster.

  2. The account model does not let you “hide” in the network. It is always clear who the sender and receiver is on any given transaction.

1 Like
#3593

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    Faster transactions, smaller fees (?), more space in the block for other transactions and smart contract information.

  2. How is the account model not as great as the UTXO model for privacy?
    The account model can only send to one account per transaction, so the use of dummy accounts to obfuscate the amount of money sent and its destination is not possible like it is with the UTXO model.

1 Like
#3594

  1. Because we need the space to program smart contracts. Also, it just makes the whole network faster.

  2. In BTC you can have multiple addresses in one transaction. You can send funds back to yourself without anyone knowing where the money really went. Which is great for privacy. ETH can only send to one Account on the chain in one TX, and everyone knows where the money went to. You don’t have the possibility to transfer money back to the same wallet. Because it really is not needed.

1 Like
#3595
  1. Its a benefit as the blocks can use more transactions.
  2. In the account model you can see which account the ether came from unlike the utxo model wherein you can send funds to multiple outputs from one transaction.
1 Like
#3596

Very impressed, thank you for your great answer!

1 Like
#3597
  1. Faster and cheaper transactions, more space in the block for more transactions
  2. In Eth you can not send money back to yourself.
1 Like
#3598
  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?

This is beneficial as the blocks have more space for smart contracts (as transactions take up less space)

  1. How is the account model not as great as the UTXO model for privacy?

With UTXO transactions it is harder to see where funds are going(as you have to track every input and output) but with ETH it is easier to track as it is simpler transaction process

2 Likes
#3599

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    It means less data per transaction and the blockchain has free space for other uses.

  2. How is the account model not as great as the UTXO model for privacy?
    The account model has less privacy since each transaction links accounts to each other. Still it is anonymous, but connections can be made through analyzing payments.

2 Likes
#3600

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    This makes it a lot simpler

  2. How is the account model not as great as the UTXO model for privacy?
    You can track every single coin.

1 Like
#3601

  1. It is beneficial because it means the network is more efficient, but also because the space is required for smart contract code.

  2. Because with the account model you cannot split an output of a transaction. It is a simple ‘one number in, one number out’ function. Making it easy to track who/where the transaction went from and to.

2 Likes
#3602
  1. It is simpler, more efficient, and allows more transactions per block.
  2. The UTXO model allows multiple outputs for a single transaction, which can help disguise those receiving the funds (multiple parties could be involved in the transaction or just one person). The account model allows for easy traceability as it is just an update of funds between two different wallets.
2 Likes
#3603
  1. Smaller transactions = smaller fees
  2. Account model - transactions can be followed
    UTXO model - can have several outputs that allows to send dummy transactions.

*Please correct me. Thank you

2 Likes
#3604

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    Ans : More space and less data. this result Faster and cheaper transaction

  2. How is the account model not as great as the UTXO model for privacy?
    Ans : We cannot send money back to ourself

2 Likes
#3605

Homework on UTXO vs Account Model - Questions

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    *Less space required in a blockchain per transactions means more transactions can be included per block which also means faster confirmation.

  2. How is the account model not as great as the UTXO model for privacy?
    *In ethereum transactions are much simple because there is an account that you can track unlike bitcoin where there is no account and only utxo and there’s no way you can tell which is which.

2 Likes
#3606

  1. Less space used is always a good thing. It enhances speed and stores more data.

  2. You can’t hide your spending. You have one input and one output from point A to point B. If the owner of that account is known, anyone can see how much ETH they have.

2 Likes
#3607

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    Transactions are smaller in size which also means less transaction cost.

  2. How is the account model not as great as the UTXO model for privacy?
    You can track the address of the transaction and parties. Also the amount sent is traceable.

2 Likes
#3608

1.) It is easier code and takes up less space on the blockchain.
2.) Everyone can follow the balance of an address, while with the UTXO model, you regularly send yourself BTC. You can still follow, how much is on a certain address, but the transaction does not give away the information of who gets what.

1 Like
#3609
  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    • Improves block speed
    • Improves storage capacity
  2. How is the account model not as great as the UTXO model for privacy?
    • UTXO can be going to yourself or someone else
      • No way of determining which UTXO goes where
    • Account model simply updates balance between parties
      • Account balances are public
1 Like
#3610

1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
It gives the space needed for blocks to record more transactions and smart contracts. As the UTXO model limits the amount of code in a block, the account model for ethereum allows for faster and more efficient transactions when the transaction sizes are smaller.
2. How is the account model not as great as the UTXO model for privacy?
As Ethereum does not have any change wallets, the destination addresses are specified in transactions. BTC does not have this problem as any unspent UTXO’s are put into a change wallet that does not specify the senders wallet necessarily.

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