It’s the fees getting charged in the Mempool. Go to Mempool.space and you can watch blocks get mined. If you have a bunch of UTXO’s on chain, when fees are low it’s a good time to combine them. This is the lowest it’s been in a long time.
In theory, the fees to spend them would be cheaper later. I’m no expert, but that’s my understanding. 🤙🏻
Thank you. I'm diving into learning about UTXO and the inner-workings of the blockchain. Fun stuff.
Every time move funds onchain, it creates a utxo. If you have a bunch of smaller utxo’s will more costly to use when fees are high. Think of it like ease of use. If you need to pay someone $ 25, easier to pay $20 and $5 (2 bills)vs (10) $1’s, (2) $5’s, and (1) $5 (13 bills).
I'm still struggling with wallets containing transactions vs wallets containing amounts. I'll get there.
I understand completely. So there’s two types…(1) onchain wallets which are the ones that have utxo’s, and (2)off chain wallets which are referred to as lightning wallets.
The onchain wallets (Sparrow Wallet, Wasabi Wallet) have gotten more sophisticated and don’t really show the utxo’s unless you go specifically find them. They say the wallet will spend in the most efficient way if you let it.
Since lightning transactions occur off chain, utxo management isn’t an issue with lightning wallets. 🤙🏻
