Let’s get a good explanation as to what UTXO’s are in layman’s terms for him 🫠🤞🏼
#asknostr
nostr:note1jurapdcw2arld5mch0s6l59eah9278yxzfmgqcldm6g8k6x8xfeqljvpgw
Discussion
UTXOs are the pieces of Bitcoin you actually own. Imagine them like bills in your wallet. If you have 3 separate $20 bills, you really have 3 UTXOs worth $20 each, not just ‘$60’ in one lump. When you spend, you hand over one or more whole bills, and if it’s too big, you get change back as a new UTXO.
If you always spend big bills, you’ll keep getting lots of small ones as change. Over time, your wallet might fill up with hundreds of $1 bills -which makes it slower and more expensive to pay (since each bill must be counted in the transaction, i.e. more transactions on block leading to higher fees). Good UTXO management means keeping a good mix of bill sizes so payments stay cheap and flexible.
It’s genuine effort to manage, truly. Consolidate when fees are low, avoid over-fragmenting, and try to use a wallet that allows you to pick which UXTO you want to spend are ways to do it.
But even I struggle to stay consistent with it.
I don’t find it that difficult at all. Are you using sparrow?
excellent explanation. now I can sort of explain it to normies
#smij #zapd #grownostr
The analogy fails at 'slower and more expensive to pay.'
Counting out 20 or 100 $1 bills from my wallet is indeed slower than handing over a 20 or 100 dollar bill, but there is no expense to do it.
Could you imagine being charged at the counter per dollar bill you handed over. 🤣
Anyway. Carry on. It almost makes sense and was a decent try anyway.
Are you suggesting that it costs the same to produce a $100 note as it does to produce 5 $20 notes?
I dont produce bills. I spend them. I'm only suggesting that the analogy fails when comparing utxos to the' use of dollars (from a wallet to the clerk).
The cost to carry and spend 5 bills is still greater than the cost to carry 1. It might feel free to you, but that's an opinion. The cost to carry 5 tons of gold bricks is 5x the cost to carry 1 ton of gold bricks.
Slightly modified consideration is that transportation costs don't scale linearly with weight.
Sure it isn't linear, but it isn't equal either. We can all agree that moving physical items requires work. 5lbs of shit requires 5x more work than 1lb. Economies of scale take effect, but there are still costs for that work associated with moving those dollars whether the spender feels or notices the cost or not. This is a significant portion of the problem with fiat currency in general.
Exactly this is the reason why bitcoin is not easy. Try to explain this to an average person and they see water burning
Try explaining online banking to your dad in 1995.
What would your dad do without online banking today? Drive to the bank to make a withdrawal?
They were very helpful, good looking out. 👊🏻
UTXO = Wad of digital cash