UTXO management.
I just heard someone say that the rule of thumb among experienced bitcoiners is to own UTXO sizes of at least 0.02btc.
What are your thoughts?
#asknostr
Discussion
Its all preference. Just dont have a 30k utxo
It’s not just preference if you plan ahead 20 years
Treat utxos like bills in your wallet. You wouldn’t want to only have $10,000 notes. You want some $10 notes to buy a coffee with and not get $9990 change.
I think aiming for 1M utxos for the better part of your utxos is a good practice. Maybe also some bigger ones if you want / can afford. But maybe also some smaller ones in case 1M would be overkill
I am not sure havin small UTXOS will ever be useful.. for what I learned it those years and most in last year of high fees transactions.. you most likely should avoid at all to have even a small amount ot utxos under 1M.. there's no cons in having only bigger ones.
The example with notes doesn't match cause you will not have a single note back of 9990$ but you will always have back just one UTXO after every transaction. Better always to consolidate smaller one in period with low fees, and batch them all together in a single one, that will have less data input for a further transaction.
Please if I am wrong and you think I am missing something explain it to me 😉
There is a privacy issue with only having large utxos.
True, that's a valid point. But would be small utxos most likely unusable in 2/3 cycles (maybe even before)?
For the privacy issue and small future payments I am trying to organise myself with custodial and not custodial solution.
I think of it like gold nugget management. I can spend from a nugget at the cost of a fee. if I want to spend with 3 nuggets I need to spend 3 fees for that transaction. the fee scales with however many nuggets I use at the time I spend not with the size of each nugget.
On the other hand. Everytime I spend the public gets to see all the nuggets I pull out to spend.
the tradeoff is between fees and privacy. you should figure out what you care about and manage your nuggets accordingly.
The thing is that at some point UTXOs below a certain size will not be spendable anymore because the economics don’t sense
Please go easy on my ignorance, but seeing that 0,01 btc is about 650 dollars atm;
Is there not a large part of the population that could only dream to ever have this much as a ‘life saving’, because they only make a few buck a day?
How can they every do self custody?
I don’t want to believe (yet) that there is some flaw in Satoshi’s creation. Because, most new people joining will be forced to trust and use a third party.. Right?
Maybe it’s wishful thinking, but will the fees not drop to a reasonable place every time again after they peak, even if millions/billions finally join? And even when large entities attack btc? Or the recent runes spam thing..
I only know about utxo’s for about a year, doing dca with 20 or 30 bucks, going with the advice of sending them straight off the exchange. Costly experience that was. Yet, if i didn't follow the online hysteria of high fees ( and that they're only going to be higher) back then and waited a few weeks, my utxo management would have been a lot cheaper.
Will people not wizen up on how and when to transact with layer one.. ?
(Could be decades IDK, and so now maybe we need to be creative and hodl)
People with btc will eventually wise up, while using other layers more, keeping L1 for savings. Even now you can put a transaction out with ‘no priority’ if you plan ahead, if you don’t mind waiting a few day/weeks.
And when more miners join, competing happens?
Can or will there not be miners joining with access to cheap energy, who have incentive to make sure btc works for everyone on earth and not just the ones who can afford 1m sats?
This because they will also benefit in the ways of a more harmonious (fiat free) world. They could choose to accept lower fees (right?) and still become wealthy.
I really know little about mining, just that miners are most likely to choose the ones that wish to pay more tx fees, right?
I just don’t see that btc is meant to be working in a way, that if 21M BTC was evenly divided over the world population, giving everyone about 250K in sats, that fees in the future could be around 100k sats or 10K or even 1K once the fiat dust settles.
Please show me the light on this matter?
I’ll need to take some time later to respond to that
Take our time, I'm curios to your thoughts
Yes, self custody in the way we know it will never scale and will also exclude the majority of the world’s population because of fees. There are ideas on how to maybe share UTXOs among several people and that may help. But I don’t know much about it.
If you imagined that the whole world will be able to use the base layer then Satoshi’s creation is probably flawed. But people are working on layers on top of Bitcoin to increase throughput and lower fees.
Fees will always fluctuate but if they will be as low as they are now in 10, 20, 30 years time is highly doubtable. When people share UTXOs they share fees too, so that might help. But what the fees really are we can just speculate. Fact is block size is limited and if more people want to transact they have to bid to get into a block. That let’s fees rise.
To DCA $20 and always go send them directly to your cold storage is a bad idea. Every time you do that you create a new UTXO. Those are going to be worthless one day. It’s much better to use a good exchange, accumulate on the exchange until you have like 0.01 BTC and then send it to cold storage. At least in my opinion. And consolidate those that you have already sent as soon as fees are low again. People will have to use block space efficiently, yes.
I don’t know about your theory with miners.
But yes, miners choose usually the txs with the highest fees.
Don't know if that helps you
Thank you. You asked for thoughts and felt good to spel mine out. I imagine it might be possible to keep fees lower later one, but i can be way off. It's like when I get cash from the atm. I could get 200 or 300 bucks and have a week or more to spend it or I can get only 20,- out the atm, so I'll need to que up sooner. Especially a longer que when other do so too. We'll learn to take out more to send to layers two three four and use.
Curious to see how that sharing utxo's develop.
🙏
in the future each sats will have a bigger value , so anyone will be able to use it, even the more poor
#asknostr #utxo #fees #bitcoin
nostr:note1qlfnj67ne5sr4ecnks88cqm8hmr3txcf0cdlffn4dncgvm5ghzqs0rms0l
No smaller than 1M (ideally 10M imo)
No more than ~20 total UTXOs