Subnostr

Really don’t understand UTXOs.

It stands for "Unspent Transaction Output" and essentially it's just a receipt to prove that you own what you say you do. And your wallet is really just a collection of those receipts.

Whenever you spend a portion of one receipt, you destroy the original and get a new receipt for the amount you didn't spend and the recipient gets their own receipt. Likewise, if you spend from multiple receipts, they're all destroyed and the same process occurs.

The proof of ownership comes from your private key. Only that key can create a signature that matches the one on your receipts.

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Discussion

nobody 1y ago

Why do they “stack up” when one DCA’s? And how does that affect one’s wallet or bitcoin in the future? I can conceptualize the receipt, I can’t understand what the problem is with DCAing and UTXOs.

elsat 1y ago

> Why do they “stack up” when one DCA’s?

You can send to one address and grow the UTXO

> And how does that affect one’s wallet or bitcoin in the future?

Address reuse reduces privacy.

> I can’t understand what the problem is with DCAing and UTXOs.

Not sure what problem you are referring to. Check out https://river.com/learn/bitcoins-utxo-model/

NotBiebs and 69 others 1y ago

Every tx to an address would generate a new utxo though, so the utxo doesn’t grow. Not sure what “stack up” means in this context.

elsat 1y ago

Oof. You are right. Bedtime 😴

NotBiebs and 69 others 1y ago

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.

The Daniel 🖖 1y ago

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

NotBiebs and 69 others 1y ago

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.