Ledger Live adds Coin control: Here's why that matters.

Ledger Live version 2.11.1 (download link) adds Coin control for power users.

The coin control feature gives advanced users more granular control over their wallets. It enables them to change how and which coins are selected when making transactions. This increases their ability to manage their privacy and the network fees they will have to pay to spend their account balance.

More control over your coins

How does it work?

The account balance for Bitcoin and its derivatives consists of all the unspent transaction outputs (UTXOs) in the account. You can think of UTXOs as the coins in a regular wallet. When you receive money, you collect coins in your wallet. Then, when you want to make a payment, you get to choose which coins you pick from your wallet. Do you pick the largest coins first? Or do you want to spend all the smaller value coins to lighten up your wallet? Similar considerations can be made when creating a Bitcoin or Bitcoin derivative (altcoin) transaction.

Before the Coin Control feature was released, all transactions involving Bitcoin (and altcoins) automatically selected their coins using the First-In-First-Out (FIFO) algorithm. This strategy includes the oldest coin in the account, and when the amount is not sufficient the second-oldest coin is added, and so forth.

As of Ledger Live version 2.11.1, users are able to make use of a dedicated Coin Control tool to choose the coin selection strategy and the coins that may be spent.

Using Coin control in Ledger Live

Coin control is available in Advanced options in the Send flow

1. Click on Send, choose an account to debit, and enter a recipient address. Click on Continue.
2. Enter an amount and click on Advanced options. You will then see:
   - The currently selected, default coin selection strategy: Oldest coins first (FIFO).
   - A toggle to enable Replace-By-Fee (RBF).
   - A toggle to include coins from unconfirmed, replaceable transactions.
3. Click on Coin control. The coin control modal opens.
4. Select a Coin selection strategy from the dropdown menu:
   - Oldest coins first (FIFO). This is the default strategy that spends the oldest coins first.
   - Minimize fees (optimize size). This strategy tries to minimize the byte size of the transaction by spending the lowest number of UTXOs. This results in a low network fee.
   - Minimize future fees (merge coins), This strategy includes the maximum number of inputs so that a potential future price rise does not make smaller UTXOs economically unspendable. If the price of a crypto asset increases too much, small UTXOs may become worth less than the cost of the network fees to spend them.
5. Select which coins may not be included in the selection by unticking their checkbox. The SELECTED indicator shows which coins will be included in the transaction. By changing the selection strategy and/or coins to include, the user has precise control over which coins end up being spent. The Coins to spend and Change to return indicators show how much is spent from and returned to the account.
6. Click on Done to return to the Send flow to verify and send the transaction.

The coin control window lets you select the strategy as well as pick the coins. Coins marked SELECTED will be included in the transaction.

Coin status

The following statuses can be displayed for a coin:

• Coins received in a transaction with 0 confirmations without RBF enabled: PENDING
• Coins received in a transaction with 0 confirmations with RBF enabled: REPLACEABLE
• Coins received in a transaction with 1337 confirmations: 1337 CONFIRMATIONS

By enabling the toggle Include coins from unconfirmed, replaceable transactions, replaceable transactions can be selected in the Coin control screen.

The Privacy use case

One of the main use cases for Coin control is to protect one’s privacy. UTXOs are, unfortunately, not perfectly fungible due to their unique history on the blockchain. Therefore, users may want to spend coins from different sources without mixing them together, because this would indicate to an outside observer of the blockchain that these addresses belong to the same account. For instance, if one were to spend coins bought on a KYC exchange, which are associated with the user’s identity, together with coins bought anonymously using cash, the anonymous coins could be linked to the user’s identity.

Another example would be that you would like to prevent spending a high-value coin for smaller purchases because this would unnecessarily show the person you’re paying how much you have. This is similar to not showing the boulanger how much is on your bank account when buying a baguette.

Let us know what you think!

We are excited to release this new feature because we think it will fulfill real needs of an important part of our users. This version of Ledger Live marks an important milestone, but we will continue working on more features that our community wants.

So, we invite you to try out Coin control in Ledger Live and let us know what you think! All feedback is welcome on this thread, on r/ledgerwallet, and you can send suggestions or get help through our official contact form.

We'd like to close out by underlining our commitment to the Bitcoin community, and our willingness to build the best wallet ecosystem for newbies as well as for power users.

Submitted September 16, 2020 at 09:57PM by fabnormal https://ift.tt/3koyQk6