Let’s say you send 100 1k sat payments to your cold storage which would create 100 utxos. And later you want to send a 50k sat payment. The network fee may be really expensive cause you’d need to consolidate 50+ utxos in order to make the payment.

Reply to this note

Please Login to reply.

Discussion

It’s because transaction fees are based on data size (block space), not value.

And when people say “stack up”, I’m guessing they mean let the balance stack up on the exchange to a larger amount before withdrawing to cold storage.