Last friday the Gulden developers released a minor update. Although the update’s change list contains just one item, the impact is nonetheless worth an article here. So what did they do? With the 2.4.6 update a discount on relay fees for transactions that contain mining/witness rewards has been introduced. A mouth full, so let’s dive into this. What does it do and what does it mean.

Transaction fees

Transaction fees are calculated based on the (data) size of a transaction (so in bytes, not in money). A single transaction could have a lot of inputs/datapoints, as you would have if you e.g. witnessed or mined 10000 blocks and then sent all those rewards somewhere in one go. That transaction would be large (in bytes) and thus be calculated and taxed with a large fee.

One of the primary purposes of this fee is to prevent people spamming the network with lots of transactions.

With mined/witness transactions this spam potential is not that big of a threat, because you have to mine 10000 blocks to get 10000 data inputs. So it is self limiting in terms of how much you can spam.

Discount

The newly implemented change applies a size discount to coinbase inputs (inputs that come from a mining or witness reward). Now when multiple of them are spent in one single transaction, the change is allowing such a transaction to have a considerable smaller fee than it otherwise would have had.

Especially with smaller mining/witness rewards (after halvings in the future) this becomes important because otherwise it would have reached a situation where miners ended up paying almost all of their rewards to fees when they wanted to move them. The change mitigates this.

Hodl

There is another catch to this. The change also provides a (small) incentive to miners to hold onto their rewards for longer and move them as a batch instead of moving them immediately to avoid higher fees.

Get the latest update 2.4.6 from Gulden.com