Re: [Bitcoin-development] New BIP32 structure

[Thomas Voegtlin <thomasv1@gmx.de>]

>
>     Related to this, here is another idea I would like to submit:
>
>     Instead of using a "gap limit" (maximal number of consecutive unused
>     addresses), I think we should get rid of the topology, and simply count
>     the number of unused addresses since the beginning of the sequence.
>     Indeed, the topology of the sequence of addresses is of no interest to
>     the user. Users often misinterpret "gap limit" as the "number of unused
>     addresses available", so I think we should just give them what they want
>     :) This is easier to understand, and it makes things more predictable,
>     because the wallet will always display the same number of unused
>     addresses (except when it is waiting for confirmations).
>
>
> I'm not convinced that it is either simpler to implement nor simpler to
> understand. I considering every "account" as completely independent
> structure (except that it has been derived from master seed). Because of
> this, I don't see a reason why number of generated addresses in one
> account should affect available addresses of other account.


Sorry if I was not clear, but no, I was not proposing that... I propose 
to count the number of unused addresses in each account, independently.

Here is an explanation with pictures:

Currently, Electrum does this:

x = used address
o = unused address

x x x o o x x x x o o o o o
       |           └───────┘ 5 unused addresses at the end (gap limit =5)
      existing gap, size 2

Case 1:
Suppose the user decides to use the 4th address starting from the end:
x x x o o x x x x x o o o o

After 3 confirmations, Electrum will create one extra address:
x x x o o x x x x x o o o o o
                     └───────┘ 5 final address (one new)

Case 2:
The user, who understands nothing about topology, decides to use the 
final address:
x x x o o x x x x o o o o x

After 3 confirmations, Electrum will create 5 new addresses:
x x x o o x x x x o o o o x o o o o o
                     |        └───────┘ 5 new addresses
                  new gap (size 4)


You see that this leads to a number of newly created addresses that 
depends on the address picked by the user. This is the behaviour that I 
want to fix. I think it is bad for two reasons: First, because it is 
unpredictable (I had a user who set his gap limit to 100, and then was 
systematically using the last address of the list, ending up with a lot 
of wasted addresses). Second, because the worst case scenario (case 2) 
creates large gaps, which are less robust to blockchain reorgs than in 
case 1. A reorg in case 1, where the last tx is cancelled will create no 
gap. A reorg in case 2 can result in a gap that is larger than the limit 
(5), if another transaction uses the final addresses. (this is why 
Electrum has to wait for a few confirmations before adding addresses)


So, what I propose is to always have a constant number of unused 
addresses in each account, instead of something that depends on the 
topology. (this number can be 10 or 20, I don't mind, but I guess Mike 
might prefer 20...)