I have read at length that address reuse should be avoided, for instance the bitcoin wiki describes numerous reasons here. I have also read Murch's master thesis on coin selection. These two concepts seem to be at ends with each other. That is, if all bitcoin users follow the instructions to never reuse an address, there should only ever be one UTXO associated to an address, and then it is abandoned once the UTXO is spent - thus only one input to any given transaction. Does following the address reuse recommendation render the concept of coin selection useless?
Some smaller related questions that I don't feel deserve their own questions:
- Do the instructions to not reuse an address include change? That is, should I generate a new key pair for any transaction that needs to receive change, and then manually specify my change be sent to the newly generated address?
- If I make a new address for every transaction, and let us say I have one key pair associated to a 1 btc UTXO and another key pair associated to a 1 btc UTXO and I want to send Alice 2 BTC, then following the address reuse policy I would ask her to provide me 2 seperate bitcoin addresses, and I would make two separate transactions, 1 btc sent to each address?
- Terminology - does the term "wallet" refer to a key pair, or to software/hardware etc. that could contain many key pairs. For example, thinking of a Nano Ledger S, is the device itself the "wallet" and each 3-tuple (private key, pub key, address) also considered a "wallet"?
EDIT: My question has been sufficiently answered - I failed to understand that when conducting a transaction with multiple UTXO inputs, they do not all need to be associated to the same address/private key. Good news Murch, your masters thesis wasn't in vain :)