Are there drawbacks to having too big of a utxo?
#asknostr
#swarmstr
Discussion
It’s not the size of your utxo, it’s how you manage it.
Privacy mostly. You'll expose a minimum baseline for your holdings to anyone you pay.
That said you could always mix it down to smaller UTXOs (for a cost)
wait, i thought it was consolidate transactions, now it's split them down?
Different concerns there but a difference between them.
The more utxos you have the more fees you'll pay when spending them but the more privacy you'll enjoy from not exposing the balance of your holdings. The fewer utxos you have the less privacy you enjoy but you'll have lower fees when spending.
Like most things in life it's a trade off you make based on your specific goals. The ideal for you is likely somewhere in the middle. For example I have several very large utxos that are my cold storage. I have many more medium and small utxos that I can choose from for spending based on amount, trust in the other party, etc. Generally I'm only spending to my lightning node for channel opens so I obviously don't care that balance is exposed to myself.