fondue on Nostr: We actually don't need to consolidate utxos. It only makes sense to consolidate when ...
We actually don't need to consolidate utxos. It only makes sense to consolidate when you have lots of small utxos which are not likely to be spent separately.
UTXOs are like dollar bills and coins. If you have a jar full of pennies, it makes sense to consolidate them to a $50 bill so you can spend it easier. In Bitcoin terms, that would mean that you might want to consolidate small UTXOs when network fees are low, so you have big UTXOs available to spend when fees are high.
But if you have a bag full of $100 bills, or a bunch of UTXOs worth $100 each, it makes no sense to consolidate them, unless you plan to spend a lot more than $100 in one transaction.
So as long as you don’t plan to buy your house or your yacht and pay in Bitcoin, keep those $100 UTXOs separate, as it helps keeping your total balance more private.
UTXOs are like dollar bills and coins. If you have a jar full of pennies, it makes sense to consolidate them to a $50 bill so you can spend it easier. In Bitcoin terms, that would mean that you might want to consolidate small UTXOs when network fees are low, so you have big UTXOs available to spend when fees are high.
But if you have a bag full of $100 bills, or a bunch of UTXOs worth $100 each, it makes no sense to consolidate them, unless you plan to spend a lot more than $100 in one transaction.
So as long as you don’t plan to buy your house or your yacht and pay in Bitcoin, keep those $100 UTXOs separate, as it helps keeping your total balance more private.