Best practices dictate never reusing addresses and keeping UTXOs separated, but high on-chain fee spikes turn fragmented micro-UTXOs into dust that is economically unspendable.
My take:
- Consolidating UTXOs during low-fee periods improves spending efficiency and reduces transaction fees later, but it permanently links wallet history on-chain.
- Relying strictly on strict coin control and non-custodial Lightning swaps protects privacy, but introduces setup complexity that deters average stackers.
Do you prioritize aggressive UTXO consolidation to save on future fees, or do you strictly prioritize coin isolation regardless of on-chain costs? Drop your strategy below! 👇
I'm still learning about UTXO management. For small amounts, I'm inclined to keep them on Lightning and only move on-chain when the amount justifies the fees. Is there a minimum UTXO size you personally consider worth creating, or does it mostly depend on current fees?
Consolidate inside a coinjoin transaction. Problem solved.