Confederacy Topic Manager

A Confederacy Topic Manager in a Bitcoin overlay network serves as a tangential party that applies a predefined set of rules to transactions to determine the admissibility of Unspent Transaction Outputs (UTXOs) into a specific overlay topic. Topic managers are essential to Confederacy's operation, helping facilitate the efficient execution of transactions within the federation of servers tracking certain topics within the Bitcoin network.

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The primary function of Topic Managers lies in assessing incoming transactions' compatibility with the rules established for a particular overlay topic. By examining these rules, Topic Managers can filter transactions, admitting only those whose UTXOs meet the criteria stipulated by the overlay network. This mechanism promotes transaction efficiency and maintains the desired structure and standards of the overlay network.

However, Topic Managers do not solely assess incoming transactions. Their functionalities extend to incorporate information related to previous UTXOs from the same topic that have just been spent by an incoming transaction. The consumption of UTXOs by new transactions often alters the desired outcome, with implications for the admissibility of new UTXOs. Topic Managers keep track of these changes, taking transformations into account to maintain the balance and rules of their specific overlay topics.

Given their pivotal role in orchestrating transactions and managing changes within overlay topics, Topic Managers are deployed in an effective implementation of the Confederacy system. They uphold the goals of specific overlays and stand as crucial components of the Confederacy network's secure, decentralised, and efficient operation.

In summary, Confederacy Topic Managers are mandated with the task of facilitating the acceptance of transactions within Bitcoin's overlay network, precisely managing UTXOs' admissibility into specific topics and capturing the dynamism and complexity of Bitcoin transactions. They play an integral role in Confederacy, helping maintain the integrity, efficiency, and scalability of Bitcoin overlay networks' operations.