I do almost exactly the same. LN wallet > on-chain hot wallet > BTC cold storage all at predetermined amounts. It keeps things moving along and my stack growing. What I haven't paid as much attention to (yet) is consolidating my UTXOs. As I'm not really spending my BTC it's not a challenge, but there's some logic in consolidation UTXOs now while it's cheap to do so. Thoughts?
Discussion
I think it depends on how much you're holding. Consolidation may not make sense if you've got less than $10-15k, but over that it could make sense depending on the cost of the consolidation. But it also might be more trouble than it's worth. Say, if you have 1btc, what you save by consolidating may not be worth the hassle. It really depends on if you're trying to eek out as much value as possible, or if you're OK with just writing the expense off as just another inconsequential fee. This is all to say there's no single right answer, and it depends on your personal style and priorities.
I never thought much about it then I started buying daily on my DCA. This does need to be handled. For now I just let it accumulate till there is a nice chunk in my hot wallet, then every month or so I move it to cold.
I also now have a @bitkey and it has a consolidation tool that tells you up front how much it will cost to go to 1 utxo
You should also consider the effect consolidation will have on your privacy because once you consolidate, all your various coins and transactions will be associated with the one address you consolidate to.
True. It could also possible mesh together my non-KYC with a small amount of KYC. Ugh - wish I was 100% non-KYC dang it.
It's not just the KYC issue. Anyone can look at the blockchain, and see which addresses are engaged in which transactions. Mapping out these records can reveal a lot of about the people behind them. Consolidation makes this arduous process exponentially easier. The principal of security through obscurity, which is often the only thing protecting the identity and behavior of bitcoin users is essentially obliterated as a result of consolidation.