Fee impact of multiple UTXOs \ stacker news ~bitcoin

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216 sats \ 7 comments \ @satgoob 19 Nov bitcoin_beginners

I was playing around with various bitcoin wallets a few weeks ago and made a beautiful, dusty wallet with 294 sats when fees were low.

I understand the more UTXOs in a transaction, the more fees you have because of the complexity, but is there a reliable way to calculate / predict the increase? I want to understand that in the context of combining wallets / pulling money out of custodial platforms like Coinbase where I sometimes buy BTC and whether it would make sense to move money into this tiny wallet.

(I expect this may be dust in the wind, maybe I just give the keys to someone who wants their first on-chain BTC that they can add to.)

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44 sats \ 2 replies \ @Bitcoiner1 19 Nov

You can not "combine wallets". Maybe, you are talking about UTXO consolidation. But moving small utxos could result in paying more SATs in fees than the value of the Utxo itself.

If you give the keys to someone, this mean that you both has access to the same wallet. It doesn't make any sense.

I have had a wallet with many small utxos. I imported the keys to Sparrow. When the mempool was low and the fees were cheap 2 SATs/vb I did a transaction with all the utxos and send it to a new address (it could be the same wallet or any other wallet)

IMO, a good Utxo size is about 150.000 / 200.000 SATs.

For smaller utxos, you can use lightning ⚡.

0 sats \ 1 reply \ @satgoob OP 19 Nov

On combining wallets, I meant sending other transactions to the same address.

On giving the keys, yeah probably not practical unless you had full trust in destroying your copy of the keys, and even then, too small to be worth the risk.

Appreciate the write up here.

159 sats \ 0 replies \ @nullcount 19 Nov

Adding a dust UTXO along with a larger UTXO as inputs to a tx does not magically remove the dust, or make the dust any more economical to spend.

A P2PKH tx is about 546 bytes, meaning you would have to pay at least 546 sats to spend it. Segwit and Taproot txns are a bit smaller ~450 bytes.

Suppose you have a 294 sat utxo and a 5000 sat utxo in the same wallet. You could just spend the 5000 sat UTXO for approx 500 bytes (500 sats fee at 1sat/byte or about 10% fee relative to the amount sent), or you could spend the 294 sat utxo for approx 500 bytes (about 170% fee), or you could spend both utxos for approx 1000 bytes (about 20% fee).

Every dust utxo is just a future "forced" donation to miners (if it gets spent) or a perpetual donation to all bitcoin holders (by burning or essentially removing those sats from the supply circulation).

You could try to convince someone that your sats are "rare" and trick them to pay you more then 1 sat per sat.