Coinpath® for UTXO Networks

On Bitcoin, Litecoin, Dogecoin, Dash and Cardano the unit of value is the unspent transaction output (UTXO). A transaction consumes some UTXOs as inputs and creates new ones as outputs. There is no account balance to follow, so Coinpath® has to decide how much of each input ends up in each output.

Coinpath® uses a proportional input-output attribution formula. It splits every output among the inputs in proportion to each input's share of the total input amount.

Worked example

Take this transaction:

Inputs:
Address A: 1 BTC
Address B: 2 BTC

Outputs:
Address C: 0.5 BTC
Address D: 2 BTC
Address B: 0.49 BTC

Address B appears on both sides, so its 0.49 BTC output is change returning to the sender. Coinpath® attributes the outputs as:

• Address C: 0.5 BTC
• Address D: 1.51 BTC (2 BTC minus the 0.49 BTC change)
• Address B: 0.49 BTC (change)

The change output is treated as a separate output in UTXO mode. In account-based mode it is ignored.

What this means in MoneyFlow Lite

• A Bitcoin transaction with many inputs and outputs produces several edges from one transaction hash. The transactions table lists the same hash once per sender-receiver pair.
• The Tracing Amount of an edge is the proportional share that came from the origin. It is often much smaller than the Txn Amount, especially after an exchange sweep.
• The tracing method shown in the MoneyFlow summary for Bitcoin is First-in, First-out, applied on top of the proportional split when funds pass through an address across several transactions.