Communicating UTXO Management \ stacker news ~Education

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239 sats \ 5 comments \ @BTCNautilus 13 Nov Education

Hey All,

Thought this might be a good place to find some discussion about communicating UTXO Management to people who are buying bitcoin. I'm one of the Co-Founders at Lightning Pay. We've had a lot of customers coming on lately that are stacking small amounts on-chain, and the problem with UTXO management around this is only getting worse. NZ$100 is currently only getting you 64k sats. We're a non-custodial brokerage, and thus, are immediately delivering sats, on-chain or via Lightning.

I am wondering if any of you have come a cross another company doing a great job communicating the issues with this to users, and guiding them toward stacking via Lightning. I think one of our options is to simply make it impossible to buy that little via the base layer, but that probably just sends them away to our friendly neighbourhood crypto casino to do the same thing there.

We started as Lighting first (only really, to begin), for just this reason. We have a bit of a primer on this issue on our website, but we're finding out there are a lot of folks who are just staying with what they know, and are now focused on doing a lot more to teach people about this over the coming weeks. Any thoughts out there would be very welcome.

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13 sats \ 1 reply \ @k00b 13 Nov

I'm sure some stackers will be able to give feedback. There've been quite a few posts about UTXO management if you're curious what people have to say about it in other contexts: #766341/related.

17 sats \ 0 replies \ @BTCNautilus OP 13 Nov

Nice! Thanks for that. I'll dig in.

10 sats \ 2 replies \ @OT 13 Nov

I like the idea of a noncustodial LN wallet that you pay off the opening fees once a threshold is met. I think phoenix, breez and Zeus all have this option.

As for UTXO management, there have been lots of articles written about it since the "ordinals" fee spikes. Communicating it in an easy and concise way will be a challenge.

33 sats \ 1 reply \ @BTCNautilus OP 13 Nov

Yeah, I think the biggest issue is getting people who are just "buying bitcoin" to think about it at all. I have a healthy relationship with my UTXOs and could probably write up a decent effort at how to do this well in our context, but the bigger issue is getting people to think about it all.

We've considered everything from nice and tidy warning messages when people are buying a little bit of bitcoin (say less than 500k sats, maybe 1m) to brute force, where every payment from our app goes to a self custody Lightning wallet whether you like it or not.

We're still in the territory where an every day, first time buyer of bitcoin could potentially mint a longer-term economically viable UTXO (after spending ~$1000 NZD). But every move up makes it more likely our users will be creating UTXOs they won't be able to spend in the future.

We need to start with what we can do with education now, but I think, ultimately, this will require hand holding where we tie in a wallet UX that makes sense an just guides the user through good decisions around this.

0 sats \ 0 replies \ @OT 13 Nov

Yeah, I mean it was only a few weeks ago that 2sat/vb TX were going through. Its not an easy thing to express to a newbie.

Still I think entering bitcoin through LN is the way to go for now.