Homework on UTXO vs Account Model

Ethereum 101
#684
  • The account model doesn’t require much space as the UTXO model, why is that a benefit?
  • How is the account model not as great as the UTXO model for privacy?

  1. Allows more space = more transactions in each block and more efficiency. Does this also relate to space needed on the block for Smart Contracts?

  2. All transactions can be traced. They are not split with every transaction as in BTC, where nobody knows who is receiving the spilt outputs. With ETH everyone can see how much was spent and where it was sent.

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#685
  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?

Transaction sizes are smaller so speed will be quicker and smaller fees because 1 block can store more transactions so is more scalable

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

It is more traceable due to no UTXO’s and the ability using bitcoin to send your change from your UTXO’s back to yourself but in a different wallet

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#686

It is clear and present who is sending and/or receiving ETH in all the transactions.

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#687

  1. The account model doesn’t save UTXO’S as it just stores balances.

  2. As you can trace it back to from which account it came from.

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#688

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?
    You can fit more transactions into a block.
  2. How is the account model not as great as the UTXO model for privacy?
    You can track exactly which accounts send and get coins in every transaction. In UTXO model one transaction can have multiple outputs and it is hard to see how exactly it is spent.
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#689

  1. for some possible benefits: more tx in a block -> faster transactions; faster data spreading between nodes. Maybe a nice consequence of a faster data exchange in the network might be a lower risk of orphaned blocks also?

  2. Ethereum’s account model is based on, well, accounts. Where there is an account with always the same address and everyone can see the balance of the account we have a lower privacy. In the utxo model of Bitcoin we have transactions with input and output, where i can send also money back to different addresses created by myself, which makes it much more complicated to find out who owns which amount. Only your wallet at the end calculates a balance of utxos for you, that can not be seen by everyone.

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#690

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    Transactions take up less space in the blocks so more transactions can be processed in the same time. This is also beneficial as the Ethereum blockchain also needs to hold smart contracts which also take up space.

  2. How is the account model not as great as the UTXO model for privacy?
    With the Account model, you can only transfer Eth to a single recipient whereas with the UTXO model, you can transfer bitcoin to multiple recipients so you could send bitcoin back to yourself making it harder to determine which transaction was the actual payment.

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#691
  1. The account model gives a balance of your ETH while the UTXO must gather all your UTXO’s to put up a balance before you can make the tx.
  2. For the account model every ETH is the same, you can only see in the tx the receiver.
    Whil in the UTXO you can trace the BTC back to where it came from.
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#692

Less space means reduced storage space and bandwith requirements. Especially the bandwith for broadcasting/distributing is beneficial because it reduces the overall transaction time, making the network faster.

Unfortunatelly the account model has some trade-offs. It requires additional security mechanisms to fix the broken immutability paradigm and can be counted as more error-prone,less stable and less secure than the bitcoin blockchain.

It is easier to obfuscate transactions with the UTXO Modell since you are not limited to 1:1 relations in a transaction. You cannot easily follow a specific sender - recipient path as you can in Ethereum.
On a detail level it is true that it is easier to track the money flow in ethereum, but on a higher level the overall picture you can get might end up beeing the same (think about big data).

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#693
  1. Its a benefit because you can store more transactions in a block as it takes less space and it can propagate faster?
  2. In UTXO you can send BTC to various wallets and back to yourself so others may not know who received it. ETH is simply a coin sent to a wallet and you can see that the wallet received that ETH
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#694

[1.] It is a benefit because miner hardware would not have to be more expensive to handle the extra need for physical memory.

[2.] With the account model, each transaction can only involve two accounts where a single amount moves from one account to another making it much easier to trace than UTXO transactions where you can have multiple amounts going out and one of them can be going to an anonymous address that you own.

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#695
  1. The less data is being stored in the blockchain the more efficient it is.
  2. The account model is less private compared to UTXO. You cannot send money to yourself - sender and receiver have each one account. Also in Ethereum you can see which account has issued the transaction.
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#696

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?
    It is a benefit since with no utxo it is faster to process. One block can then store more transactions.

  2. How is the account model not as great as the UTXO model for privacy?
    A account model is more like a bankaccount where you can see how much A has sent to B. UTXO it is based on outputs and inputs where nobody knows the amount and where multipule outputs are going you are maybe sending it to the same account or to other accounts that you own.

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#697
  1. more txs / block = faster txs
  2. you can see all directly in one output (from/where to) instead of spread in different outputs to unknown adresses
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#698

  1. It takes up less space and it is easier to process/track the state of each smart contract

  2. The account model limits privacy because you know who is sending an receiving funds

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#699

  1. Having more space is always beneficial. With more space, blocks can have more transactions stored on them. There is also more space for smart contract code.

  2. The account model makes it harder to stay private. You can see where the exact amount of money comes and goes. With UTXO model, one transaction can have more than 1 output with unspecified amounts. One of the outputs can even be yourself.

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#700

  • The account model doesn’t require much space as the UTXO model, why is that a benefit?
    reducing block size-- increases speed–increase ability of storage of data.

  • How is the account model not as great as the UTXO model for privacy?
    The account moden is simpler, you track a TX from A-B. UTXO is better for privacy because you can send BTC to different adresses in the same time, even to yourself (hide your spends in mulitple transactions). Which results in that it is more difficult to track

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#701

Answer:

  • When a transaction takes up smaller space this results in faster processing speeds and lower transaction fees.
    *There is less privacy on Ethereum as there is no way to ‘mask’ a transaction. On the Bitcoin network you can send multiple UTXO’s with some of them being returned to yourself which creates a mystery that is not easy to solve as to where the original UTXO eminated from. Whereas on Ethereum network it is not possible to do this. You can only simply send a transaction which can be traced back to yourself.
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#702
  1. Because transaction size poses scaling issues as we have seen in Bitcoin.
  2. In the UTXO model it is not clear who receives the outputs of a transaction, whereas in the account model it is obvious.
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#703

1.) The account model of Ethereum that requires less space is beneficial because it takes up less space on the blockchain and therefore, one can have a lot more transactions on a block. Another benefit is that it allows for slightly more fungibility since an individual coin can not be tracked and potentially linked to some unethical event. With the UTXO model, each coin’s entire history can be tracked by following the output history. So if a coin is linked to, for example, a hacking event, then it would likely be harder to sell that coin.

2.) As far as privacy goes, the UTXO model is better because of the way the output is recorded on the blockchain. When a transaction is initiated, all of the bitcoin being held by that address is sent out. The desired amount is sent to the recipient and the rest is sent to another address controlled by the sender. An outsider looking at the output of a transaction can not tell which address is the recipient and which is the sender. So there is a great deal more privacy than with the account model.

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