pull down to refresh

Best Practices for Wasabi CoinJoin and Cold Storage UTXO Managementstorage
870 sats \ 1 comment \ @PictureRoom 2h bitcoin

I have a question about utilizing Wasabi Wallet and performing CoinJoins. From what I have been gathering, it seems that performing Wasabi CoinJoins is best done by sending non-coinjoined funds from my Lightning channels, accruing a decent amount to then perform the CoinJoin, achieving an anonymity score of at least 30+, and then either spending those coins directly from Wasabi or sending straight to cold storage.

My main confusion is about the withdrawal process to cold storage:

  1. Should I send multiple CoinJoined UTXOs in a single transaction to cold storage, or make separate transactions for each UTXO?
    - I understand that combining multiple mixed UTXOs in one transaction links them on-chain (similar to consolidation), which could reduce privacy.
    However, sending many small separate transactions seems inefficient and expensive.
  2. What is the recommended approach for balancing privacy and fee efficiency?
    - If I want larger UTXOs in cold storage for future spending, is it acceptable to combine several private coins (anonymity score 40+) into one withdrawal?
    - Or should I strictly keep each CoinJoined UTXO separate, even if it means many small transactions?
  3. Regarding UTXO consolidation in cold storage:
    - If I've already consolidated CoinJoined UTXOs in my cold wallet, would it be worthwhile to send them back to Wasabi for another round of CoinJoins to restore privacy?
  4. When spending from cold storage later:
    - How should I think about the trade-off between maintaining privacy (keeping UTXOs separate) versus managing block space efficiently (consolidating during low-fee periods)?

I'm looking for practical guidance on how most privacy-conscious Bitcoin users handle this workflow. Any insights would be greatly appreciated!

write
preview
related posts
123 sats \ 0 replies \ @Scoresby 1h

I don't have any great answers, but I'll share how I think about this:

I have a cold storage wallet in which I have mixed coins and unmixed coins. This is probably not ideal, but I label and use coin control, so I feel okay with it.

I have an assortment of utxo sizes. I'm hoping that when I need to spend from this wallet, I'll be able to find a single utxo that is close to what is needed and then I will spend only that utxo and mix[1] the change.

My only suggestion is that if you've already consolidated CoinJoined UTXOs in your cold wallet, don't mess with them until you actually need to spend them. It carries the risk that fees will be higher in the future when you do need to mix them or something, but I don't think this risk is much greater than the possibility that payjoins or some other privacy preserving tools are developed.

I doubt my thoughts are very helpful here, though. It's a hard problem to solve.

  1. I am quite a fan of Darth's suggestions about using lightning to get privacy. Receiving to a channel, then spending to a different lightning wallet and atomic swapping to the chain is not a bad way to mix. ↩

reply