I am attempting to verify I perceive the query: Why Do We Use Change Descriptors when Constructing Wallets?
Context: I work on the Bitcoin Improvement Equipment, the place considered one of our core sorts is the Pockets kind. It has usually required 2 descriptors (an exterior descriptor and a change (inside) descriptor). This concept is normal apply and used broadly within the trade, however when urgent myself to jot down about it in our documentation, I used to be left questioning if I actually knew why this was the case. Moreover, customers that request the Pockets be usable with just one descriptor had robust opinions about how the apply of utilizing 2 descriptors was perhaps outdated and never required below sure circumstances. One consumer instructed us that it was a mistake to double down on the inner/exterior descriptor schism, and that it was a relic of the previous of those that use electrum wallets.
As a library maintainer, that is the form of factor I need to have a stable grasp on. I am additionally main our documentation efforts, and plan on together with a web page on this.
Right here is my present understanding and questions.
Benefits of utilizing 2 descriptors
- It doubtlessly permits you settle for 0-conf cash when they’re coming to vary addresses, since you should have been the one to provoke that transaction and won’t double-spend your self.
- Privateness when utilizing a public electrum server: in instances the place you may ship a complete xpub to an electrum server, you are higher off not giving up your entire keychain however solely half? (at this level it appears trivial to reconstruct transaction historical past however nonetheless, I assume not giving it out is best than doing it).
- Having only one descriptor forces you to maintain monitor of addresses you’ve got given out when constructing transactions, as a result of in any other case your pockets may use an exterior deal with already given out as change, and if this deal with given out to somebody finally ends up being utilized by them, you may double transactions at that deal with.
- In instances the place a pockets is recovered, change addresses can nonetheless be labeled as change.
Questions I Nonetheless Have
- Are there different pitfalls customers of single-descriptor wallets ought to concentrate on within the case the place wallets use extra personal sync instruments like personal Electrum servers and CBF, and utilizing fashionable pockets practices that by no means give out repeat addresses?
- Does the “change” keychain come into coin choice in any respect in Core? For instance, are there algos for coin choice the place figuring out if a UTXO is a part of the change keychain quite than the exterior keychain issues? If that’s the case, how does it come into play?
- Every other historic data that is good to know and think about for builders of pockets could be appreciated.
Thanks!
