If you want to pay 0.05btc and you only have a bunch of 0.01btc utxos, it will cost more in fees than if you had one big 0.1 utxo.
Every new utxo you need to add to a transaction in order to spend the amount you want to spend increases the amount of block space it takes up and therefore the amount you need to pay in fees.
However, everyone assumes that a single person owns all the inputs in a normal transaction, so when you spend utxos in the same transaction, you tie the history of each of those utxos together into one history.
Say you bought some btc on an exchange and got some in trade for work you did. If you spend both those utxos together it is likely that governments and anyone with access to the exchanges database now knows you own both utxos.
So, I think the beat course of action is to practice very careful labelling of your utxos (where they came from, are they kyc'd) and to think a little whenever you need to spend.
Then when it comes time for spending make sure you use a wallet that allows you to select utxos (sometimes called coin control).
For example, if you need to spend btc and you can choose between combining two smaller utxos that come from different sources, and using one larger utxo that comes from a single source, you may choose to use the single utxo to avoid losing some privacy.
Ultimately, it is a lot of trade offs and in my experience privacy preserving spending often comes with a little extra cost.
As far as numbers go, if you are creating utxos that are smaller than .01, you probably want to be using lightning -- it is better privacy anyway.
Also, I'm far from the most knowledgeable about this, so do lots of research.
If you want to pay 0.05btc and you only have a bunch of 0.01btc utxos, it will cost more in fees than if you had one big 0.1 utxo.
Every new utxo you need to add to a transaction in order to spend the amount you want to spend increases the amount of block space it takes up and therefore the amount you need to pay in fees.
However, everyone assumes that a single person owns all the inputs in a normal transaction, so when you spend utxos in the same transaction, you tie the history of each of those utxos together into one history.
Say you bought some btc on an exchange and got some in trade for work you did. If you spend both those utxos together it is likely that governments and anyone with access to the exchanges database now knows you own both utxos.
So, I think the beat course of action is to practice very careful labelling of your utxos (where they came from, are they kyc'd) and to think a little whenever you need to spend.
Then when it comes time for spending make sure you use a wallet that allows you to select utxos (sometimes called coin control).
For example, if you need to spend btc and you can choose between combining two smaller utxos that come from different sources, and using one larger utxo that comes from a single source, you may choose to use the single utxo to avoid losing some privacy.
Ultimately, it is a lot of trade offs and in my experience privacy preserving spending often comes with a little extra cost.
As far as numbers go, if you are creating utxos that are smaller than .01, you probably want to be using lightning -- it is better privacy anyway.
Also, I'm far from the most knowledgeable about this, so do lots of research.