# Emercoin’s Transaction Optimizer Reduces Blockchain Inflation

January 18, 2016Bitcoin Business

Emercoins Transaction Optimizer Reduces Blockchain Inflation. newsbtc Emercoin , a shared ledger platform and cryptocurrency which combines POS + POW algorithms to process transactions on its blockchain has announced the launch of a solution called “Transaction Optimizer,” to reduce the inflation of the blockchain network.

By design, every cryptocurrency is only allowed to spend the entire Unspent Transaction Output (UTXO) when settling a transaction. However, if a digital wallet contains many past transactions, it is forced to select the subset of suitable UTXO’s to generate the transaction.

In a more technical sense, the number of possible subsets is 2^N, where N is the number of available UTXOs. Therefore, if the wallet contains more than ~20 UTXOs, it will be practically impossible to check all of them and find the best subset of UTXO’s to use.

The problem is, Bitcoin and the majority of the commercially available cryptocurrency wallets utilize an algorithm called a “stochastic approach,” in selecting the optimal subset of an Unspent Transaction Output. In this algorithm, the wallet is required to perform 1,000 attempts at random UTXO selections. After a subset with a minimal amount is used, a transaction is generated with two outputs – a payment and a charge back output. Thus, the probability of successfully matching the sum of UTXO subsets to the output value is low.

Mathematically, Emercoin demonstrated the probability to be:

(N_fit * N_attempts) / (2^N).

Where:

N is the number of UTXOs,N_fit is the number of possible optimal transactions (without change),N_attempts is 1000 for the current Bitcoin wallet code Transaction Optimizer As a solution to the problem of cryptocurrency wallets and methods of processing transactions, Emercoin launched a technology called the Transaction Optimizer, which is an algorithm that selects the optimal subset of UTXO for a new outgoing transaction. The main difference is, if an exact […]

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