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As we traditional bank it is possible to add a reference when sending money away.

Is it possible to put some short custom data when sending a blockchain transaction, such as payment reference ? I'm not seeing this anywere on Bitcoin Core. Seen a parameter "input data" for ethereum but look like its only sued for smartcontract ABI.

I'm asking this because it would help to put reference on transaction to apply accounting betwen two parties (eg if one sent multiple invoice to someone wich pay through blockchain)

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No, there is no “reference” field on Bitcoin transactions. While the recent Inscription hype demonstrates (once again) that you can attach arbitrary data to Bitcoin transactions, the “Bitcoin way” of keeping track of payment context is by using a fresh Bitcoin Invoice Address per transaction and using the address itself as the unique identifier to store the context of the payment locally.

It is generally considered bad practice to reuse invoice addresses.

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  • Thank you this make sense. So thats the way most bitcoin merchant work I guess. I'm not sure how they handle the transaction fee to unify their bitcoin tho, especially for little amount invoices
    – Maxime CATY
    Commented Feb 19, 2023 at 22:31
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    @MaximeCATY Generally they try to consolidate their UTXOs during low-fee periods. Additionally, an increasing number of merchants are accepting payments exclusively over Lightning which avoids this problem.
    – Vojtěch Strnad
    Commented Feb 20, 2023 at 19:40

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