The curious case of transfers from the same direction in Ethereum
In recent years, Bitcoin has undergone significant changes in its transaction rules, particularly with respect to the input/output addresses. For those who are not familiar, this can be a complex issue. In this article, we will deepen the details of the transfers of the same direction in Ethereum and explore why they are possible.
What is an input/output address?
In Bitcoin, an address serves as an entry (to send coins) and exit (to receive coins). When sending coins from one address to another, it is called transaction. Each transaction consists of two parts: entry and exit. The input specifies the towering wallet address, while the exit specifies the address of the recipient’s wallet.
The old rule in Bitcoin
Historically, Bitcoin transactions allowed the same address to be used for both the entrance and for the output. This was done by configuring the same entrance address as the Departure Directorate. However, this rule change occurred in Bitcoin 3.1, which introduced a new type of transaction called “script” instructions.
The rule of the same direction changes
In response to concerns about safety, scalability and usability, Ethereum developers introduced a new set of rules for transactions involving the same input/output addresses. From version 4.0 (previously known as ETH 1.3), Bitcoin’s equivalent transaction is called “expense.”
Can transfers from the same address occur?
Yes, you read it correctly. In Ethereum, it is technically possible to spend a currency in its own entrance address and then return the remaining coins to the same entrance address without changing the output address.
Here is an example:
- Alice spends 10 BTC (Bitcoin) in its wallet direction.
- She deposits the coins back to her account in the same wallet address, making sure not to change the amount or direction of the deposit.
- The transaction is successful and the recipient receives the funds deposited without any change in its input/output addresses.
Why is this possible?
The key reason to allow transfers of the same direction is due to the fact that the Ethereum approach in scalability has led to a simplification of transactions. By using the type of transaction “expense”, Ethereum avoids creating new and complex scripts or additional data structures necessary for a more nuanced transfer logic.
On the contrary, Bitcoin script instructions introduced in version 3.1 are designed to handle more advanced use cases while maintaining efficiency and safety. The change of rule of the same direction aimed to reduce complexity and improve usability for a broader audience.
Conclusion
The flexibility of the Ethereum network with respect to the transfers of the same address allows users to optimize their transactions reusing the existing currencies between the input/output addresses. However, this comes with some warnings: it requires careful management to avoid any problem with wallet balances or transaction validation.
Although we have seen greater adoption and usability for complex transactions in Ethereum, the underlying logic is still based on its focus on scalability and simplicity.
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