An enlightening conversaiton with GPTo1 about labels, messages, and comments in #Bitcoin Core and supporting walls. Sharing here if these sorts of details interest you: https://chatgpt.com/share/67b620b2-b350-8011-b9b5-1df4fc016eff

This is a copy of a conversation between ChatGPT & Anonymous.

You said:

Key Points

1. User-Friendly Organization
   • You can apply labels to addresses to indicate their purpose—for example, “Donation Address,” “Personal Savings,” or “Mining Rewards.”
   • Labels make it easier to identify which incoming transactions belong to which address or purpose when you view them in the Bitcoin Core GUI or query them via the command line or API.
2. Difference from Older “Accounts”
   • Prior to version 0.17.0, Bitcoin Core used a feature called accounts to group addresses. This feature was often confusing, especially because it implied some form of balance segregation or separate “accounts” within a single wallet, which was not truly the case.
   • The accounts system was deprecated and replaced by labels, which serve the same primary purpose (helping you organize addresses) without implying that balances were kept separately.
3. No Impact on Balances or Privacy
   • Labels do not create any new cryptographic or ledger-based distinction. All addresses in a single wallet still draw from the same pool of UTXOs (unspent transaction outputs).
   • Labels are purely a naming convention for your convenience and do not affect how transactions are processed on the network.
4. How to Use Labels
   • In the Bitcoin Core GUI, you can assign a label when you generate or request a new receiving address.
   • On the command line (or via the JSON-RPC interface), methods such as getnewaddress "label" or setlabel "address" "label" allow you to create or change labels programmatically.
   • You can retrieve addresses by label using commands like getaddressesbylabel.

You said:

1. One label per address
   • Each address can have exactly one label at any given time. If you run a command like setlabel on an address that already has a label, the new label overwrites the old one. There is no mechanism in Bitcoin Core’s standard wallet to assign multiple labels simultaneously to a single address.
2. Same label on multiple addresses
   • You can use the same label on as many addresses as you want. For instance, you might label ten different addresses as "Donations", all of which will appear under that label in the GUI or when you query via RPC.
3. No uniqueness requirement on labels
   • Labels themselves are just free-form text. There is no restriction that labels must be unique—only that each address can store one label at a time.

• You cannot apply 2 different labels to the same address (one label per address only).
• You can apply the same label to multiple addresses (and re-use labels as often as you want).

You said:

1. Labels on Addresses:
   As discussed, you can label addresses (one label per address), which indirectly labels all future incoming transactions sent to those addresses. However, that labeling is address-oriented rather than transaction- or UTXO-oriented.
2. Comment Fields for Sending Transactions:
   When you use the sendtoaddress or sendmany RPCs (or the GUI equivalent), you can supply optional "comment" and "comment_to" fields.
   • These comments are purely local metadata, stored in your wallet file (not on the blockchain).
   • They may help you identify outgoing payments you made, but they are not stored or displayed in the same way as labels, and they do not apply to incoming transactions.
3. Coin Control:
   Bitcoin Core has a “Coin Control” feature which lets you manually pick which UTXOs to spend. This can help you track your UTXOs in a more hands-on way, but there is no feature to label individual UTXOs.

No Built-In UTXO or Transaction Labeling

• Use address labels creatively:
  E.g., assign different addresses (with different labels) for specific uses. Incoming transactions show up under those labels.
• Maintain an external record or database:
  Some users write scripts or use third-party software to watch the blockchain (or their own node) and store custom tags in an external system keyed by transaction ID or outpoint (TXID + vout).
• Embed data on-chain (not recommended for simple labels):
  Technically possible by using OP_RETURN outputs, but it’s not a great idea for personal labeling (you pay fees and bloat the chain, and the label becomes public forever).

Summary

• Yes: You can apply labels to addresses.
• Yes: You can include a local-only comment when creating a sending transaction.
• No: There’s no direct, built-in feature to “label” a particular transaction or UTXO, beyond what you can achieve via address labeling or external note-keeping.

You said:

• The label parameter in a BIP21 URI is typically meant to identify who the payment is for (e.g., “Alice’s Coffee Shop”) so that the sender’s wallet can show a friendly name.
• The message parameter is intended for a short note or description of why the payment is being made (e.g., “Payment for latte” or “Invoice #1234”).
• In practice, different wallets may handle (or ignore) these fields differently. The recipient (the one creating the URI) controls what appears in label and message, but the sender (the one scanning/paying) simply sees—and possibly stores or displays—those values in their wallet interface.

1. Role of “label” in BIP21 URIs

• Purpose: The label field is typically used to specify a human-readable name for the payee or payment context.
  • Example URI:
    perl
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    bitcoin:1CoffeeShopAddress...?amount=0.005&label=Alice%27s%20Coffee%20Shop
  • A sender’s wallet might display “Alice’s Coffee Shop” when scanning this QR code or clicking the link.
• Who Sets It?: The recipient (Alice, in this example) includes the label when generating the BIP21 URI.
• How the Sender Uses It: The sender’s wallet might show the label in its UI or store it as a local label for that address. How exactly it is displayed or stored depends on the wallet.

2. Role of “message” in BIP21 URIs

• Purpose: The message field is intended as a short note, memo, or description about the payment.
  • Example URI:
    perl
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    bitcoin:1CoffeeShopAddress...?amount=0.005&label=Alice%27s%20Coffee%20Shop&message=Latte%20with%20extra%20milk
  • A sender’s wallet could display “Latte with extra milk” as the reason for payment.
• Who Sets It?: Again, the recipient includes this field in the URI they generate—often to remind the payer why they are paying.
• How the Sender Uses It: The sender’s wallet may show the message on the payment screen or store it in a local comment field. Unlike a blockchain-level note, this message does not appear on-chain—it is purely for user convenience in the wallet’s interface.

3. Practical Differences

1. Intended Meaning
   • label: Identifies who is receiving the payment (or the context of the address).
   • message: Explains why the payment is happening (like an invoice reference or short memo).
2. Wallet Handling
   • Most wallets will display the label as a payee name or address nickname.
   • Some wallets will also display the message text, but support is less universal than for label.
3. Storage
   • If a wallet supports labels for external addresses, it might automatically create a local label in the user’s address book.
   • The message might get treated like a local comment in the wallet. Some wallets ignore it entirely.
   • Neither label nor message is enforced by the Bitcoin protocol, and they do not appear on the blockchain. They are purely optional and only matter to the recipient’s and sender’s wallet software.

4. Usage Scenarios

Recipient (URI Creator)

• Sets label to something that helps the payer recognize the payee or purpose (e.g., “Donation for My Blog” or “Alice’s Coffee Shop”).
• Sets message for details like “Donation to help fund website hosting” or “Latte with extra milk.”
• The recipient typically generates the QR code or link containing these parameters.

Sender (Payer)

• Scans or clicks the URI to import the payment details into their wallet.
• Sees label as a friendly name for the payee, if the wallet supports it.
• Sees message as an optional description of the payment, if the wallet supports it.
• Decides whether to actually pay (the wallet might also let the user override the amount or leave a comment in their own local ledger, etc.).

5. Summary

• label = Friendly name/identifier for the address recipient.
• message = Short note describing why the payment is requested.
• Recipient sets them, sender’s wallet may display and/or store them.
• They do not appear on-chain and are not guaranteed to be supported uniformly by all wallets (though label is quite common).

You said:

• In Bitcoin Core, the “label” for an address is used by the wallet owner (i.e. the recipient) to keep track of what that address is for—from their point of view. Example: “Bob Payment,” “Donation Address,” “Tips Jar,” etc.
• In a BIP21 URI, the label parameter is presented to the payer and typically identifies the recipient or a brief context about the payment (e.g. “Alice’s Coffee Shop”).

Why the “Contradiction” Arises

• BIP21’s “label” = “What do I (the recipient) want the payer to see in their UI about who/what they are paying?”
• Bitcoin Core’s address “label” = “How do I (the recipient) want to categorize or name this address in my own records?”

How Wallets Actually Handle It

• Some will import that label into their local address book or transaction metadata (so the payer sees “Alice’s Coffee Shop” on their side).
• Others may ignore it or show it only once on the payment screen.
• Bitcoin Core itself, if you scan your own BIP21 URI, might interpret that label as a local label if you do not already have an internal label for that address—but this can lead to the “contradiction” you mention (everything ends up labeled “Alice’s Coffee Shop” in your own wallet, which is not what you want).

Resolving the Mismatch

1. You, as the receiver, often generate a BIP21 URI with a “friendly name” for your customers’ convenience (label=Alice%20Coffee%20Shop).
2. You, as the receiver, keep your own local label in Bitcoin Core that helps you manage addresses internally (e.g., “Customer Bob #123”).
3. These two labels don’t need to be the same, because they serve different audiences and different purposes.

• There’s no technical conflict—just an overlap in the word “label” being used for two different perspectives.
• BIP21’s label is for the payer’s convenience (who sees a descriptor of you).
• Bitcoin Core’s label is for your own internal organization of addresses.
• They can (and often do) differ without causing any real problem.