Blockstream Green: Coin Control

Full control over your Bitcoin wallet’s unspent transaction outputs (UTXOs)

By Grubles

Blockstream Green is built from the ground up to provide industry-leading security and user experience. Green is the easiest way to secure your bitcoin and Liquid Network assets with multisignature technology, a key (pun intended!) feature in Bitcoin and the Liquid Network that allows you to program your assets to require sign-off from multiple independent keys in order for funds to be transferred.

This means you can eliminate single points of failure that can lead to theft. A hacker would need to compromise the wallet on your device and the remote infrastructure storing the second key used in the multisignature wallet. Green also supports standard single signature Bitcoin and Liquid wallets, and hardware wallets from Trezor, Ledger, and of course our own hardware wallet Blockstream Jade.

A new feature we’ve recently added to Green is called Coin Control.

What is Coin Control?

Check out our new Bitcoin tech video explainer series Deciphered

To understand what Coin Control is, we need a short overview on how transactions work on Bitcoin.

Bitcoin and Liquid use an Unspent Transaction Output (UTXO) model for their transactions. Bitcoins are created through the mining process and start their life on what are called coinbase outputs. These coins have no history since they are completely new and unspent. When a miner spends those coins to a new address, they become inputs to the transaction that sends them to the new address (the output).

This process continues indefinitely as coins are sent to new owners over time. The current ledger of who currently owns which coins is called the unspent transaction output set, or UTXO set.

Two example transactions

A transaction is simply a declaration of which of your coins you want to spend to which specific addresses. Much like if you were to sign a document stating you want to send Bob $100 from your ACME Bank account.

If you want to send a specific amount to someone, your wallet will automatically create a change address that it uses to send the remaining coins you have left over after deducting the amount sent to the recipient. The change address will become an output in the transaction along with the recipient’s address.

The Bitcoin network is transparent, meaning everyone can see everyone else’s transactions. This means that when someone sends you some bitcoin, and you want to consolidate that into the rest of your holdings, then you might reveal your entire bitcoin holdings to them unintentionally. This is where Coin Control comes in handy.

Coin Control allows you to individually select specific outputs to use as inputs in a transaction. Maybe you don’t want your local coffee shop to know how much bitcoin you spend at the grocery store and vice versa. Or you don’t want your colleague to know how much bitcoin you have after covering for dinner. Using Coin Control, you can label and segregate your funds without consolidating accidentally and harming your financial privacy.

Dust Attacks

Blockstream Green also protects you from a specific technique that is used to harm the privacy of users’ wallets called a “dust attack”. A dust attack is when an attacker sends a very small amount of bitcoin to one of your addresses hoping you will consolidate that output into your larger holdings.

Consolidating this output reveals to the attacker how much bitcoin you truly own. Green automatically detects these attacks and labels the “dust” outputs so you don’t accidentally commingle them into your larger bitcoin stack.

How to use Coin Control in Green

Now that you’ve learned how a Bitcoin wallet manages its bitcoin and what Bitcoin transactions are, get started using Coin Control in the latest Blockstream Green release.

Once you’re ready, stop by the Blockstream Green Community Telegram group to chat about all things Bitcoin, multisig wallets, and improving your privacy with Coin Control.

Be sure to subscribe to the Blockstream YouTube channel to catch the latest Deciphered episodes too!

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store