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I heard about it somewhere, but no where found a complete step by step solution.

I've heard that for addresses in the same wallet, the transaction fees can be avoided. Is it a rumor ?

If no, then please help on how to attain it.

By wallet, I mean to say the wallet that is being used by bitcoind/litecoind or bitcoin-qt/litecoin-qt on a machine. (they usually use the wallet.dat)

  • It would be helpful if you clarified what you mean by "same wallet." Are you talking about two different accounts on the same online wallet service/exchange? Or two different addresses in your bitcoin-qt client? – Tony Mar 16 '14 at 6:22
  • @Tony I modified the question to explain what I mean by wallet. – coding_idiot Mar 16 '14 at 20:12
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A traditional Bitcoin wallet contains a bunch of private keys and a bunch of accounts. Each private key has a corresponding Bitcoin address.

For each private key that the wallet has issued, some account is associated with that key. This serves only one purpose -- it determine which account gets its balance raised when funds are received at that address.

Intra-wallet transfers require no transaction and thus pay no fee. I can switch from 10 Bitcoins in account "Jeff" and 0 in account "Judy" to 0 in "Jeff" and 10 in "Judy" just by swapping a 0 and a 10 inside the wallet. The Bitcoins remain at the same address, they are just credited to a different account.

  • you mean to change the label of addresses, right ? Well, I was actually looking to aggregate large number of small transactions, is there a way ? so as to pay minimum fee. – coding_idiot Mar 14 '14 at 11:30
  • @coding_idiot Not really. You're better off just waiting and letting the outputs get old. – David Schwartz Mar 14 '14 at 18:36
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The network does not know if two addresses are in the same wallet or not.

Since the transaction fees are verified/received by the network, an inter-wallet transaction MUST be the same as an intra-wallet transaction, in every way.

  • This is not true. An intra-wallet transaction can consist of just moving a balance from one account to another without a transaction. Inside a wallet, it doesn't matter what addresses balances are associated with, just what account. – David Schwartz Mar 14 '14 at 3:08
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To reply to your updated question: If you have two addresses in your wallet, and want to send coins from one of the addresses to the other, then you do have to pay fees. The network doesn't know whether two addresses in the same wallet. (Well, technically it could, if both addresses were used as inputs in the same transaction at some point, but I digress - in any case, the network doesn't care. Two different addresses are two different addresses.)

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There are no fees say if you didn't want to actually move bitcoins in between address. As David Schwartz pointed out, you can have accounts which are basically bitcoin wallet organizers in which you can add or remove bitcoins from.

If say you need to send coins that are 'stored' in address A from address B which is in your wallet, you'd need to create a transaction to move coins from A to B, and then another transaction that moves coins from B to destination address. The Bitcoin-QT wallet doesn't yet let you do this through the GUI, maybe with a future coin control update.

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