The curious case of the transfers of the same address in Ethereum
In recent years, Bitcoin has undergone significant changes in its transaction rules, in particular as regards the input/output addresses. For those who are not familiar, this can be a complex topic. In this article, we will deepen the details of the transfers of the same address in Ethereum and explore because they are possible.
What is an input/output address?
In Bitcoin, an address acts both from input (for sending coins) and as output (to receive coins). When sending coins from one address to another, it is called transaction. Each transaction consists of two parts: input and output. The entrance specifies the address of the sender’s portfolio, while the exit specifies the recipient’s wallet address.
The old Bitcoin rule
Historically, Bitcoin transactions have made it possible to use the same address for both input and output. This was done by setting the same input address as the output address. However, this modification of the rule occurred in Bitcoin 3.1, which introduced a new type of transaction called “script” instructions.
The rule of the same address changes
In response to the concerns on safety, scalability and usability, Ethereum developers have introduced a new series of rules for transactions involving the same input/output addresses. Starting from version 4.0 (previously known as ETH 1.3), the type of equivalent Bitcoin transaction is called “shopping”.
Can the transfers of the same address happen?
Yes, you read it correctly. In Ethereum, it is technically possible to spend a coin on your input address and then return the remaining coins to the same input address without changing the output address.
Here is an example:
- Alice spends 10 BTC (Bitcoin) on her wallet address.
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Why is it possible?
The key reason to allow transfers of the same address is due to the fact that Ethereum’s attention on scalability has led to a simplification of the transactions. Using the type of “shopping” transaction, Ethereum avoids creating new complex scripts or additional data structures required for a more shaded transfer logic.
On the contrary, the Bitcoin script instructions introduced in version 3.1 are designed to manage more advanced use cases while maintaining efficiency and safety. The change in the rules of the same address aimed to reduce complexity and improve usability for a wider audience.
Conclusion
The flexibility of the Ethereum network as regards the transfers of the same address allows users to optimize their transactions by reusing the existing coins between the input/output addresses. However, this is provided with some warnings: it requires careful management to avoid problems with portfolio sales or validation of transactions.
While we saw a greater adoption and usability for complex transactions on Ethereum, the logic below remains based on its attention to scalability and simplicity.