Am trying to understand some of my old ADA transactions on the blockchain.
Can someone explain to me what happened here:
Did the transaction get split into 2 parts… and one half in a state of limbo?
Then 4 days later the limbo half continues onwards and is split again.
Is this a normal behaviour of ADA transactions?
Totally normal:
You sent 25 ADA to Ae2tdPwUPEYyJhHiHb2f4D7bh7UfVqg5tcmgetTYvfJkvXcizzJy1r1zMHA.
The other addresses are all you own.
Cardano works with UTxOs, unspent transaction outputs, bags of ADA that you received in previous transactions. In this case, your wallet app decided to take one bag with 24.7 ADA and, since that was not enough, another with 3616.162135 ADA.
You will almost never have a UTxO lying around with exactly the right amount, what you want to send plus the transaction fee. So, almost always there will be change going back to your own wallet, one of your own addresses.
This are the 3615.684297 ADA in the other output. It’s an output of a transaction and it is so far unspent. So, it is a UTxO that can be used in the next transaction.
Thanks for the helpful reply.
How can you tell Ae2tdPwUPEYzEHD9ktfJmGgR2M9yszc5uqHgAuE3KvwCMbRW9ddheF5GtAD was my other ADA address? I didn’t know but I guess you’re right if it’s UTXO.
Any advice on how to handle UTXO from a tax software API parsing perspective?.. coming from tax software that relies on matching 2 transactions by their transaction hashes? (whereby UTXO can have more than 2 transactions sharing the same transaction hash).
In this case: Because you told me that the second transaction is also yours, the second transaction spends that output again, and, hence, you – or rather your wallet app – must have had the key to spend from it, it must have been your address.
For Ae2tdPwUPEYwWg3FJkm1xw1rh7W7vAstZb3QaZkM73FwLiZYvSWuKYQxjne, it’s not that 100%. You haven’t given a transaction where those 3515.512963 ADA are spent again. So, it would be theoretically possible – but highly unlikely – that it is not your address. Since it gets the much larger and much more crooked sum, and since it is also an Ae2… address like the other addresses from your wallet (presumably a Yoroi wallet), it is most likely a third address of your wallet.
(Edit: Scratch that! I just saw that that is your first address again. I actually can’t understand that. It shouldn’t have happened in Yoroi – except if there was a bug back in 2019. It really wants to use new addresses all the time. Which wallet app(s) did you use?)
Yoroi did use new addresses for the change every time. And it also gave you new, unused addresses to give out to receive ADA from others every time it saw the last address being used. So your wallet consists of lots and lots of addresses. Yoroi still does that, but nowadays those are Shelley addresses – looking like addr1… and not like Ae2… anymore.
A lot of wallet apps now use a single address forever, since it doesn’t make any sense for privacy anymore, since the addresses are linked by the common stake key contained in them, anyway. It is not a must of the UTxO model that there have to be that many addresses. There can also be a lot of UTxOs on the same address. You can see that in your first transaction, where two outputs from the same address are taken as inputs.
But accounting software, explorers, wallet apps, still have to know how to deal with the history of those multi-address wallets if they are not totally sure that they will only ever encounter single-address mode wallets.
I can’t completely parse that. There cannot be two transactions sharing the same hash. It is still one transaction, but it can have an arbitrary number of inputs and outputs.
Existing tax software should, in fact, already have logic to deal with the UTxO model, since Bitcoin uses it. In Bitcoin, you also have these lots and lots of addresses all belonging to the same wallet that have to somehow be consolidated in accounting and tax reporting.
And accounting also should have no problem dealing with transactions with multiple in- and outputs. It also happens in real-world transactions, not only in crypto, for example, when value-added tax has to be separated from the net revenue, or when a transaction contains fees.
Haven’t done my taxes up to now, but I would want a tax software that can consolidate addresses into accounts and further all of my accounts into a grand total of my holdings. Tax authorities might want to have the address-specific information to validate/verify what you are telling them (or they might not bother), but in the end they are probably not that interested in the technical details of wallets and addresses, but just in your overall profits. But it’s best to ask them what they want … or look if they already have how-tos online.
Sure, that makes sense regarding the staking key being visible and the same for every address.
What about the supposed security benefit of using each address once. I thought there was a supposed quantum computing resistance because the spending key wasn’t actually revealed until you used it. Since the spending key part of the address is only a hash of your public key and this hash can’t be reversed by quantum computers?
Educate me @HeptaSean.
I honestly don’t know if it is that relevant.
Theoretically, it is true, of course, but the risk that Ed25119 will be broken in the near future seems rather small to me.
And we will have a lot of other problems then – ssh keys and other non-cryptocurrency systems being insecure, blockchains that do expose the public keys directly (they are supposed to be public without problem after all), stake keys on Cardano (which cannot be used only once, they are in the chain’s history as soon as the first delegation was made), wallets that in principle use HD, but where the user withdraws from an exchange to the same address again and again, …
The quantum computer risk is quite a few years out as far as we know and when it becomes real, we have to do something real, we have to switch to a quantum-resistant signature algorithm completely and move the funds over from old addresses. I don’t see that much value in averting it incompletely by “use only once”.
But having written this text, this is obviously matter of opinion. I just would defend that it is at least not grossly reckless to just use an asymmetric signature scheme as it is intended and have the public key, well, public and reused.
Thanks. All very good points.
