Bitcoin   has noted a multitude of different stories regarding its potential use cases over the past decade. However, although it was developed to adopt standardized forms of currency such as fiat regulated by the central bank, Bitcoin has struggled to pose a threat due to its intensive network validation and consensus process.

While most upgrades have sought to reduce network congestion by speeding up the process, as in the case of layered solutions like the Lightning Network, technological improvements such as its coin selection algorithm may also play a role. crucial.

In the last episode of the Stephan Livera podcast, Bitcoin Engineer at BitGo, Murch, talked about the selection of Bitcoin coins and its impact on transaction fees on the Bitcoin network . Coin selection roughly refers to how the Bitcoin network algorithm ends up selecting coins from its UTXO [unspent transaction output] for future transactions.

Regarding the need to balance confidentiality and reducing transaction costs when deciding whether to consolidate UTXOs, Murch argued:

“It totally depends on your compromises and this is also why there is no single part selection for everyone and no single UTXO management for everyone.”

Source: Glassnode

According to data from Glassnode, since the beginning of the year, while the price has registered notable fluctuations, the number of Bitcoin transactions has registered a relative decline, reflecting the price structure to some extent.

Murch also argued that there were many implications when it came to managing large wallets since there were smaller pieces of Bitcoin in them. He also noted that large companies getting more deposits than withdrawals, they have really need to understand how to combine smaller units into larger pieces crypto. He stressed,

"They really have to think about how they will combine all these little bits of Bitcoin into two big chunks, because when the fees hit 200, you don't want to send a transaction with more than a hundred entries in order to pay us and to go and withdraw. “

Murch further noted that the spending inputs should be cheaper as this makes it easier to reduce UTXO and with updates like implementing Schnorr / Taproot the cost of sending Bitcoin is going to be a lot cheaper, which could even attract more use cases. and a wider audience towards the world's largest cryptocurrency.