Unique Serial Number for Every Single Satoshi

Serial number has two parts: the integer part is the block number where the satoshi is generated, and  the fractional part represents each unique satoshi. Taking the generation at block 110000 as example:


http://blockexplorer.com/tx/4e10436ca8206a2dd760dd351210a5120a3824d4eb53011be0a7b9a33b368208


There were 50BTC, or 5000000000 satoshi generated. Therefore, the serial number of these satoshi are #110000.0000000001 to #110000.5000000000. Tailing zeros are reserved.


Here we define RULE OF INHERITANCE: In a transaction, the input sequence atomized to satoshi, with each satoshi has its unique serial number. The satoshi sequence is mirrored to the output, based on the output sequence. If transaction fee is paid (i.e. input > output), the fee is considered as the last output. In case of coinbase transaction, transaction fee is sorted after standard block reward, according to the transaction order in the block.


Using the previous example, the 50BTC is completely transferred to another address:


http://blockexplorer.com/tx/3abed8a3aa728e881a9ef85062fe11b79b490c885295c3c55fc6a534199a5dc5#i398943


Therefore, 12WFtKBsRLtV8p1NwRqe7YwYdi1rjwTZhA inherits satoshis #110000.0000000001 to #110000.5000000000.


Next, the 50BTC is split into two outputs: the first one with 5.2BTC and the second one with 44.8BTC:


http://blockexplorer.com/tx/2faea2cc59b32f5cc19fd8aee85db3e82bbdccb32c52879fecddc592b172d981#i399136


Therefore, the first output inherits satoshis #110000.0000000001 to #110000.0520000000, and the second output inherits satoshis #110000.0520000001 to #110000.5000000000.


The next one becomes more complicated. The 5.2BTC output in the previous transaction is mixed with other inputs. There were two outputs, with 0.36BTC and 60BTC respectively:


http://blockexplorer.com/tx/2ba980e8b17c46e671e8a09bef43815e26ae561facc35f415ef04b11bf4b7545#i405322


Based on the rule of inheritance, the first output will inherit the first 36000000 satoshis in the first input (bfdc71884b80...:0). All the rest will go to the second output. Those satoshis #110000.0000000001 to #110000.0520000000 are embedded somewhere in the middle of the second output. To be precise, they are the #2171000001st to #2691000000th satoshis in the second output. (5.11-0.36+5.49+5.3+1.15+5.02=21.71)


In the following transaction, the 60BTC is mixed with other inputs to make a single output of 954.27BTC


http://blockexplorer.com/tx/03616a5d76508d45a0def171c29b3672714410c49648704eb766f2e74b4ed1fe#i406741


Therefore, the satoshis #110000.0000000001 to #110000.0520000000 become the 81598000001st to 82118000000th satoshis of the output. (1.25+500+19+1+161.82+5.2+106+21.71=815.98)


Here we use another example with transaction fee:


http://blockexplorer.com/tx/afe357b19ca0b0c939b414d3dd63d523bb2a518237df51afc7d6f26098967c7d


Transaction fee of 0.00574567 (574567 satoshi) is paid. According to the rule of inheritance, transaction fee is the last output. The last 574567 satoshis of input comes from transaction bcf2b1c4f75c...:0, which is the generation of block 99120. Therefore, the transaction fee is satoshis #99120.4999425434 to #99120.5000000000


The fee is collected by the miner of block 100035:


http://blockexplorer.com/block/00000000000135cb86be36978e74a54cfd2b9143f827a589c9e27fde3463b753


Since this is the only transaction with fee in this block, those satoshis #99120.4999425434 to #99120.5000000000 are embedded at the end of the coinbase transaction. Therefore, the coinbase transaction has satoshis #100035.0000000001 to #100035.5000000000 and #99120.4999425434 to #99120.5000000000, in the exact order.


With this system, every satoshi has its unique identifier, or “color”. To make a lending contract, for example, the borrower will send a colored satoshi (e.g. #123456.1357924680) to the lender, and the lender will send the loan in the same transaction. The lender may sell the contract to other people with similar mechanism, and the borrower will repay to the address with the colored satoshi.


We can also have decentralized security market with the system. Each satoshi sent from the issuer’s address is equal to one share. Although the serial numbers of these satoshis may not be continuous, it is still traceable. The issuer will pay dividend to the addresses with colored satoshis, and the shareholders will vote using the address private keys.


Please note that this proposal has nothing to do with criminals/scammers tracing.