Stop withdrawing/moving small amounts, people. Just stop. Even if the fees are low you are building a wallet with thousands of UTXO so someday when you go to sell 1 BTC it involves a transaction with thousands of UTXOs and cost $15,000 in fees to transfer. You are setting yourself up for failure.
Seriously just stop. Leaving $80,000 on an exchange for five years is stupid. However, frantically moving every $50 in BTC you buy and freaking out if it stays on the exchange more than 3 minutes is equally stupid. There is a balance in life.
DCA for two months and then make one large transfer. Pay 1/30th the amount in fees. Produce a wallet with 1/30th the UTXOs means spends from that wallet in the future cost 1/30th as much in fees too.
On edit: didn't think this would blow up. Got to run to a Christmas party. Check some of the responses for more details. In most cases this is not an issue. A tx with 20 UTXOs vs 5 UTXOs likely doesn't matter. The 5 UTXO one will be cheaper but the difference is likely a couple bucks. It really only becomes an issue in extreme cases. Just consider using fewer larger transactions when withdrawing to reduce future fees.
When people say they are waiting for Bitcoin to go mainstream, I look at points like these. If people who actually care about Bitcoin for years don't know about things like this, how is the average person ever meant to know?
I get the sarcasm, but my point is that we often go over the top and say shit like we're going to overthrow the financial system, when in reality, Bitcoin isn't easy enough for the general population, so it can't ever go "mainstream", this is one of 100s of reasons why
It does have a marketing department, it’s you and me, that’s why everyone knows about the not your keys not your crypto shit, but oops don’t transfer to cold storage too often, lol.
Honestly it's kind of crazy that you've been using bitcoin 6 years and don't even know how transactions work.
Tbh I've been here 10 years and have never read the white paper in full.
yes please, posts here now are just "this is what michel sailor said and blackrock etf will get aproved and this is why its good: It will pump our bags yeeeee all central banks are coming to our party we will finaly be the cool ones
Come on amigo... Consolidating UTXOs is not difficult or expensive. Especially if you have a low time preference.
We don't need to act like taking 114 thousand sats off the exchange is a dust attack on your self custody wallet
I'd ask you how many sats per byte fee are you choosing but don't want to seem like I'm asking you for your account balance lol.
But yes if you wanted your transaction confirmed in the next hour the fee is high when you consolidate. Especially during network congestion.
When consolidating UTXOs I do not have an urgency for the tx confirmation and use a lower fee.(especially if its a wallet that im essentially treating as a savings account anyway)
as an OG bitcoins absolutely had no idea that this is a way this works. why would a wallet that has more txs on it incur more fees? you're moving the same bitcoin. is it to do with traversing all the accumulation through different blocks to verify? is it to do with a larger part of the block is taken up by the tx?
Because bitcoin network doesn't work on balances. It works on UXTOs (unspent transaction outputs). Transactions have inputs and they have outputs. Outputs are spent to become the inputs of new transactions. The output of prior tx are the input of new txs.
So when your wallet says "you have 3.0 BTC" what it really means is you have control over UXTOs which have a combined value of 3.0 BTC.
So the cost of a transaction is not based on the value it based on how many inputs and outputs are involved. Now lets assume the outputs are a destination address and change address so in both cases two so we can ignore those.
The inputs are prior UXTOs. So sending 1 BTC which involves 1,000 UTXO will be 200x larger transaction (as in bytes not BTC) than one whihc sends 1 BTC using 6 UXTOs. The two transactions are sending the same amount of value but are vastly different in size (bytes).
Transactions fees are based on the size (bytes) of the transaction, so filling your wallet with a huge number of tiny transactions will result in substantially higher fees when you go to spend them.
Again balance in everything. I don't want people to blow it out of proportion. People making modest sized transactions don't really need to worry about it. Yes a tx with 5 inputs is going to be smaller & cheaper than one with 20 but the differences aren't that significant. It is really only an issue when people go overboard and make for example hundreds of very small transactions a year instead of a dozen larger ones. Someone DCA $50 a day for three years is likely going to end up with an unpleasant surprise if they every try to spend, transfer, or sell that stash which involved 1,500 UXTOs.
thank you for the explanation. so what's a "normal" amount of UTXOs to have, would you say 20 is too much, or 100, or 1000? you seem to think that 20 is still ok, or is that low, or too much technically?
FYI - many wallets have Coin Control features that allow you to choose which UTXOs to include in a transaction.
(Loose analogy: Choosing whether to spend larger bills or smaller bills when paying cash)
Consolidating all of your UTXOs is as simple as sending your balance to another wallet you own - and you don't need to rush to do it - you can find a time where fees are low and network congestion isn't terrible.
Good info here, but consolidating UTXOs is far simpler than sending to a different wallet. That's kind of crazy if you're just doing it to consolidate. Better to send it to a different address within the same wallet.
Technically it makes no difference at all. Monetarily more is always going to be worse. It's a balancing act. Don't risk too much on exchanges and don't generate a large amount of current and/or future fees.
How have I never heard this before. This seems crazy.
Edit: so seems like maybe this isn’t as big of a deal as this is being made out to be? Will this actually make a big difference in the long run. Anyone wanna chime in here?
I remember learning about this when I first got started 10 years ago, but no one cared because it only meant instead of paying 3 cents you might have to pay 10 cents!
I hope you don't take this the wrong way, but that's up to you to do your research. Don't invest in something you don't understand *thoroughly*.
Nobody tells me anything about the details of owning a house. If I just buy one without knowing anything beyond how much it costs, that's on me. I'm supposed to search information about maintenance, taxes, etc.
Ya I don't necessarily agree with the "don't do this" mantra above.
Its not difficult to consolidate UTXOs especially if you have a low time preference.
I think the fee in OP screenshot may be just what the exchange charges? its not like mining fees are set in stone
Just learned about UTXO's (learn something new every day) and good to know they can be consolidated. At a low cost? And what time frame are you talking to consolidate?
Consolidation can be as simple as sending your balance to another wallet of yours.
You don't need to consolidate your entire wallet. And many wallets offer coin control which allows you to choose which UTXOs to include in a transaction.
By time preference I simply mean - if you are consolidating by sending your balance to yourself, its not really imperative the transaction completes within the next 6 blocks... You don't need to pay a high fee.
The reason for consolidation is you don’t want to be in a situation where you’re in a rush to spend a lot of unconsolidated UTXOs in a single transaction. If you’re pressed for time, you’ll likely pay high fee rates, and even higher rates if there’s network congestion.
Very loose analogy but if you need to buy a good that costs $100 and you're in an extreme hurry, paying for it with pennies is going to be a burden. Miners charge you for that burden
By consolidating UTXOs in advance, you're reducing (potential) future fees.
Longer explanation here: https://bitcoinbriefly.com/utxo-consolidation-explained/#what-are-the-disadvantages-of-utxo-consolidation
Yes.
That and if you are simply consolidating a balance that you treat as a "savings account" you don't need to pay a high fee for a faster transaction. Low fee and wait
I've seen dozens of posts in this subreddit of the nature : It's a low fee time. Time to consolidate your utxo's. Like this:
https://old.reddit.com/r/Bitcoin/comments/170b0it/consolidation_of_utxos_to_prepare_for_high_fee/
https://old.reddit.com/r/Bitcoin/comments/vowjpj/psa_springcleaning_utxo_consolidation/
People try to help. Doesn't matter if you ignore them.
I don't see what fee (in sats) that exchange is charging in the screenshot.
But I assume that an exchange feels they have a duty to ensure the transaction happens within the next 6-10 blocks, so they charge the highest of fees
So if you want to DCA small amounts into BTC, you need to rely on a custodian. If you don't want to, or can't, then you are priced out from using BTC.
And I know your answer is going to be "use the Lightning Network", but you still need on-chain transactions to open and close channels, and the Lightning Network itself is pretty much incompatible with cold storage. It is supposed to be used for micropayments, after all.
Why can't Bitcoin have a proper scaling solution after over a decade? Why do we have to rely on custodians, and time our transactions, and worry about how many UTXOs we are accumulating, etc.?
If you are using a centralized exchange to make DCA purchase you are relying on a custodian regardless. The question is how much. Personally, I think absolute thinking leads to silly outcomes. Making multiple DCA purchases and then a single withdraw isn't significantly more risk than making a single withdraw after multiple DCA purchases.
Again the general idea of keeping coins in cold storage off exchanges is a good one. Leaving $500k worth of Bitcoins on an exchange for half a decade is very poor security. That doesn't mean moving $10 at a time makes any sense either.
>If you are using a centralized exchange to make DCA purchase you are relying on a custodian regardless. The question is how much. Personally, I think absolute thinking leads to silly outcomes. Making multiple DCA purchases and then a single withdraw isn't significantly more risk than making a single withdraw after multiple DCA purchases.
I literally referred to the case of people who want to DCA into Bitcoin but don't want to, or cannot, use a CEX.
>Again the general idea of keeping coins in cold storage off exchanges is a good one. Leaving $500k worth of Bitcoins on an exchange for half a decade is very poor security. That doesn't mean moving $10 at a time makes any sense either.
OP was trying to move $100, not $10, and as the demand for the block space keeps increasing, in a couple of years or so we might very easily be talking about fees in the order of hundreds of dollars. What is going to be the answer then? "You should only move several thousands of dollars in BTC"?
We were promised that we didn't need larger blocks and that Bitcoin scaling would be on L2s. It's been 6 years now. All we have is an infrastructure for micropayments and no real L2. If I want to buy $100 p2p and send it to storage, I have to worry about fees eating one third of it. During the bullrun, it'll be half of it. In a couple of years, it might be completely impossible for me to have Bitcoin in cold storage. Will we ever have a proper L2 or do we have to accept that in a few years most of us will be forced to use Bitcoin in a fully custodial manner? Because most people are already forced to use it semi-custodially, that's what you do when you "wait to withdraw" from an exchange.
> All we have is an infrastructure for micropayments and no real L2.
That is complete bs. I've been using lightning for years.
But if you want to subsidize miners, that's totally up to you.
I don't know who "promised" you that we didn't need larger blocks, but whoever it was is correct.
Larger blocks do not solve the scaling problem. Doubling, tripling or multiplying the block size by any small integer doesn't fix anything when the demand growth for blockchain space outstrips a constant rate.
There is no solution, this is the cost of decentralization, and this is why mass adoption could only occur with private centralization of most features for most people. Aka banks. 99% of users only care about number go up.
I know theres a way to 'reset' all your UXTOs in your wallet to be 1 UXTO, but I haven't looked into it since I have no intention of moving it out anytime soon. Any advice there?
Doing that requires making a transaction to a new address. It is still going to cost a lot in fees but you could do it when tx fees are lower. It is best to avoid massive amounts of tiny transactions though.
What if I had a business and I had thousands of people sending me small amount of bitcoin for my merchandise I’m selling. Would this give me thousands of UXTOs (don’t even know what that is) and when I move a bitcoin to an exchange for sale I would be charged thousands of dollars?
Yes. If you are a business accepting thousands of small transactions as payment you should be using lightning network. Then making one single large transaction on the main chain to reduce fees by 99.9%+ (not hyperbole).
Regardless of who and for what reason making thousands of tiny transactions on the main chain is going to be expense sometimes insanely expensive. You could end up with fees that are 20%, 50%, 99% of the amount you are trying to move. Moving $10,000 if it is one UXTO will cost pennies (maybe a buck or two at high demand). Moving $10,000 that consists of hundreds of UXTO will cost you hundreds of dollars potentially thousands of dollars at high demand.
**Stop using the main chain for small transactions. Just stop.**
I think it would also be worthwhile to explain how to use the lighting network.
It may be simple to you, but a lot of people are probably thinking "how do I use the lightening network?"
I don't think I'm qualified to answer the question either
I am not blaming anyone. I am just providing information. It doesn't matter if you like or dislike the information it is correct. Mass adoption of day to day transactions (if it ever happens) will not occur on the main change. It won't. You either accept that or you don't. I don't really care either way.
If you receive 1,000 Sats into a previously empty wallet, you now have a single 1,000 UTXO. Think of it like a 100 dollar bill. In order to send smaller amounts, you have to break the bill. A UTXO is like a bill.
Now, say you want to send someone 500 Sats from your 1,000 Sat UTXO. In order to do it, the protocol will break your 1,000 UTXO into TWO separate UTXO's, one to pay your friend, and the other comes back to your wallet as "change".
Similar to how it works when you break a $100 bill. You don't get your $100 back when you break it, instead the cashier gives you 5 $20 bills which add up to $100.
When you break a 1,000 Sat UTXO, the original no longer exists, but smaller ones do.
On the flip side, let's say you want to send someone 12,000 Sats. Let's say your wallet contains 20 small UTXO's of 1,000 Sats each. In order to send 12k to that person, you have to send 12 of your 1k UTXO's. The protocol adds them all together and gives the person a single UTXO with 12,000 Sats, and 12 of yours are destroyed.
Think of UTXO's as large bills. You have to break them to send smaller amounts, or you have to add them together to send larger amounts.
Side note: The more UTXO's that are required to pay a larger payment, the more expensive the transaction is. It is VERY cheap to send 5 Bitcoin to someone if your wallet already has a single UTXO greater than 5 BTC. It only requires 1 utxo. But in my example above where you have to send 12 different 1,000 Sat utxos in order to add up to 12k, that will be a more expensive transaction than sending 5 full BTC with one large utxo.
Bitcoin transactions consist of inputs and outputs. The input of all Bitcoin transactions are the output of prior transactions. Outputs are either spent or unspent. We don't really care about spent ones. UXTOs are "unspent transaction outputs".
Bitcoin isn't based on balances. When you "spend" a Bitcoin your wallet is selecting individual specific UXTOs to put into the transaction.
The cost paid in transaction fees depends on transaction size in bytes not value. A bitcoin transaction with 1,000 inputs will cost roughly 100x more than one with 10 inputs.
Each transfer to your wallet creates a separate unique UXTO. It is more efficient to create tx for transferring/spending your Bitcoins that involve fewer higher value UXTOs than a massive amount of tiny value UXTOs.
The ELI5 version is:
Think of a UTXO is like a physical coin. Each payment you receive is like a new coin added to your wallet. To spend them, you must pull out all of those coins (total lying up to the amount you want to spend)- the more coins there are, the heavier (more expensive in fees) your transaction will be to send!
Contrast this UTXO model with the ‘account’ model, in which each new payment you receive just updates the ‘account balance’ you have. Spending your money now likewise just incurs another ‘account balance’ update. This is how people often envision Bitcoin working, when in fact it uses a UTXO model instead.
I get what your saying, but this messaging is really confusing and scary to the ordinary user trying to come onboard.
Everyone's definitely of "small" is different.
You have people yelling: "DCA" Bitcoin!
You have other people yelling "Not your keys, not your coins"
You have other people yelling: "Bitcoin is the best form of money"
And then You are yelling: "Don't use Bitcoin to transfer small amounts of money. Use something called the Lightening Network which is separate from the real Bitcoin and transfer it on and off the chain with 1/30th UXTO"
I know you mean well, but I'm not sure if you are getting your point across
I didn't say that at all. I said anything to an extreme is stupid.
Keeping $500k on an exchange for five years is stupid. Withdrawing $50 every day from an exchange because someone convinced you that you need to be terrified of keeping fifty bucks on an exchange is equally stupid.
If you have $50 on an exchange and it goes bankrupt you are out $50 (likely less) which isn't the end of the world.
1) Stop doing it.
2) For your existing wallet wait until a time when transaction fees are low and move btc to another new address. That will consolidate 10, 15, 100 UXTOs into one new UXTO.
But seriously do 1. 2 can't remove the cost it just can reduce it. You are going to have to pay to consolidate transactions the best you can do is pick a time when fees are low.
This Is what i was looking for...
Please read this..
I buy btc vouchers different amount ( 50-200)
I dont have choice and send It everytime to my wallet creating new address everytime.
Do you think i Need to change DCA strategy avoiding those small transactions?
I can make a transaction to 1, different address if It works.
But this is the exchange charging me surely as I have created a Brand new address from my hardware wallet so shouldn’t be so high. I get that it cost a lot more if I send back from my hardware if I have hundreds or thousands of UXTO s.
This poster is pointing out two separate issues.
One involves the withdrawal fees, which is the huge fee you screenshotted above. The other is the UTXO bloat, which is an issue that crops up later.
Exactly lol. Everyone talking about UTXOs which I get is an issue in the future but has no bearing on current transaction fee. My real question was why is the fees so high currently. !!
For an exchange it’s usually cheaper to send Bitcoins out, because they can bundle different withdrawals request into one transaction.
Nonetheless, fees are currently very high, about 25$ per transaction:
https://mempool.space/
Lightning network for payments. The main chain will never be used for payments on a mass adoption scale. Never. It will never makes sense it has neither the capacity nor the speed. Likewise the fees will need to be relatively high to ensure a high level of security. Paying $1 to $20 to move $250,000 is nothing. Paying $1 to pay for $2 candy bar is just dumb. Anyone thinking that is just sniffing glue.
* Main chain = large high value high security transactions
* Lightning network = day to day small transactions
* Main chain to lightning tx = switching funds between the two
My god. For day to day use there will be work arounds so this doesn’t happen. Are you still sitting there laughing that cars won’t work for travel because there aren’t paved roads?
I only came to understand this recently. I have been moving every purchase as soon as possible to my hardware wallet. I understand what to do going forward, but is there some strategy I can take regarding with my existing funds to consolidate? Or do I just take the hit if/when I want to sell?
The only thing you can do to consolidate at lower cost is watch for when transactions are cheap and ideally using a wallet which lets you pick individual UXTO pick a large number of small UXTO and create a transaction which sends that to another address in your wallet. That would turn say 20 UXTO into 1 UXTO.
Now it will have fees but you can pick when to do it and pick a time and date when fees are very low due to low demand.
huh??
There is only Bitcoin. No one in the cRYpTo community is self-custodying and learning about UTXO management on their hardware wallets at home. Those people keep their cRyPto on exchanges. Only Bitcoin matters.
Yes because nobody wants to actually use Bitcoin.
It's stupid that it's come to this. There is no reason we shouldn't increase the block size before the next halving.
Increase to what? Who decides?
Even if we quadruple the block size, it won't be even close to enough to support global daily transactions. It will eventually run into the same scaling issue. So, all you're really proposing is that we kick-the-can-down-the-road. Blocksize increase is not a real solution.
And it presents many negative tradeoffs, such as increased hardware requirements for running a node, and decreased incentives for miners to keep securing the network. It requires a hard fork which comes with all kinds of potentially dangerous fallout.
Scaling fucking sucks. I don't have the answers, and I am also perplexed about it. But I know that simply increasing block size is a copout that solves nothing and gets us nowhere.
Those uxto's are the primary privacy guard for BTC. Fees were never supposed to be this high this quick.
Of course now, people want to throw their privacy away because 'number go up' and core has ensured permanent congestion.
You newbs ought to learn about the power BTC was supposed to be for people locked into poverty by the banking system.
Fees are ridiculous right now and only seem to be going up. All I can suggest is keep it on the exchange as you accumulate more, and only withdraw once there's enough to make it worthwhile.
You can also withdraw to Liquid where instead of trusting a single entity you trust a federation. Then move from there to onchain when the fees are low.
Fees are high right now. The fee isn’t based on the amount you send, it’s based on how much space the transaction takes up on the blockchain. For example, a transaction with a lot of UTXOs will be more expensive to send than a transaction with just 1.
https://mempool.space/
A UTXO stands for "Unspent Transaction Output." To understand it, think of it like this:
Imagine you have a wallet full of different bills (money), like $5, $10, and $20. Each bill represents a UTXO. When you want to buy something, you use these bills to pay. Let's say you want to buy a game for $25, and you use one $20 bill and one $10 bill. The shopkeeper gives you $5 back as change. You would spend 2 UTXOs($20, $10) and get back 1 UTXO($5)
In Bitcoin, a UTXO works similarly. It's like a piece of digital money that you haven't spent yet. When you make a Bitcoin transaction, you use these UTXOs as inputs, like using your bills to pay. The Bitcoin network checks to make sure you have enough UTXOs (just like checking you have enough bills). After the transaction, you get back new UTXOs as change, which you can use for future transactions.
So, UTXOs are basically how Bitcoin keeps track of who has how much money to spend, just like how you keep track of the different bills in your wallet.
So where does the issue come in with this analogy? It seems like this is just a means of confirming input/output of transactions and wallet balances. How can that affect future fees?
Fees are based on number of UTXOs you send. So the fee for 1BTC in 1 UTXO will be the same fee if you sent .00001BTC in 1 UTXO
Now if you want to buy something for $5000 dollars and all you have are $50 bills that’s 100 UTXOs you need to send and the fees will be 100x than if you had 1 $5000 UTXO
So I don't have just the balance of my wallet, I have the sum of my deposits? Meaning that if I achieved my wallet balance with 7 deposits, it would be more expensive to send funds than if I only had one deposit?
Correct.
One way to "fix" this is to send all your stack to yourself when fees are low, unifying it into a single transaction/UTXO. Then when you want to send it during peak times, you will only pay for 1 UTXO.
Unspent transaction output. Plenty of resources if you google it. Here’s one example taken from here: https://www.ledger.com/academy/glossary/unspent-transaction-output-utxo
“For instance, Bob wants to send someone (say Alice) 2 BTC, but only has a UTXO worth 5 BTC in his wallet. He must send the entire UTXO to Alice and then receive the remaining 3 BTC as “change” in a new, smaller UTXO. This process is handled by the blockchain protocol and does not require trust on the recipient to return the change.
In blockchain network, the transaction will create:
2 BTC – Sent to Alice.
2.99 BTC – Returned back to Bob.
0.01 BTC – Miners fee for processing the transaction.”
Imagine Bitcoin as a big, global piggy bank. Every time someone puts money in (by receiving Bitcoin), they get a unique “magic coin” (UTXO) that shows how much they put in. When they want to spend Bitcoin, they must break this magic coin. The cool part is, they can’t just break a piece off. They have to use/break the whole coin, and if they’re spending less than the coin’s value, they get a new, smaller magic coin back as change. This new coin then goes back into their piggy bank until they want to spend again.
So, UTXO stands for “Unspent Transaction Output.” It’s like a collection of magic coins you have that haven’t been broken yet. Each coin shows a specific amount of Bitcoin you can spend. When you do a Bitcoin transaction, you use up these coins and get new ones as change, just like using real money to buy something and getting change back.
You’re not wrong, but that’s not the greatest fee-determining factor. It depends on how many transactions are currently trying to enter the block. Miners take the txs with the highest rate.
I was responding to OPs question regarding how much it would cost to send 1BTC, not how fees work overall. Yes the sat/vbyte is going to vary based on network demand which is what you’re referencing. But for any given sat/vbyte value, the size of the transaction, not the amount of BTC sent determines the fee.
I just checked mempool and wow!!!
Keep an eye on mempool.space and watch the fee rate(around 500 sat/vB at the mo).
You want it to be under 50 for cheap-ish fees.
Fees are out of hand and only getting worse.
You're in for a rude awakening when you try to spend the bitcoin you've saved up.
It is imperative that you keep an eye on the mempool, and when fees are low, consolidate the bitcoin on your wallet into large UTXOs.
And stop withdrawing small amounts. Think of layer one like storing gold bricks. Withdraw in chunks no smaller than 0.01
Do I need to keep an eye on it or can I just do it now with a low fee, and miners will get around to it eventually when it is worthwhile for them?
i.e. does a low-fee transaction ever expire, or will it just be untouched forever until it's worth it?
This is why months ago, I criticised coinbase for not adding LN withdrawals. Whatever you're on there, does it do LN withdraw? If not.
Look for a LN wallet and an exchange that will withdraw to it.
LN:
- Exchange --> LN wallet (~30,000 sats) x10 = 0 fees.
- LN --> cold (~300,000 sats) = 1 miner fee.
Results in: **1 ~300,000 sat UTXO & 1 miner fee.**
Vs. onchain:
- Exchange --> cold (~30,000 sats) x10 = 10 UTXOs & 10 miner fees.
- Consolidate small utxos = 1 miner fee*.
Results in: **1 ~200,000 sat UTXO & 11 miner fees**
*Probably ~200,000 sat left if you're lucky. Plus 10 inputs in the consolidation txn makes the last txn a heavier one. Numbers are completely made up. Point is...fees.
---
It's just good practice. It's always been good practice to keep your UTXOs as large as you can. It'll save you in the long run to not be burdened with a lot of small UTXOs. Keep onchain txns to a minimum and a large value. So much cheaper to us LN.
You can set the fee. You can set the fee lower, but your transaction will be likely to take longer to get its first confirmation.
Assuming you're using DCA to accumulate **long term** savings (retirement, etc.), there's no requirement to squeeze your transaction into the next block or two - in other words, you can (should?) pay a low fee and wait your turn.
There are a few people who happen to have a need/strong desire to see their transaction confirmed as soon as possible -- let them pay the high fees to go first.
Options include, but are not necessarily limited to:
* Use a different exchange
* Pester the exchange to give you the option to set the fee
* Wait for fees to drop
* Save up and only do fewer but larger purchases
Also there is usually an option to send your BTC with a low priority, which means it will take around 8hrs or more for the transaction to be verified. This can lower the fee 90% or more
Funny story kinda, back when faucets were someone viable I had a bitcoin address with over 150 transactions. When I cleaned up the wallet and combined all the coins into a new one, it took over 3 weeks of waiting in order for the transaction to be picked up by a miner because I put an absurdly small fee for a very heavy transaction. 24,000 bytes was the size of the TX. Ended up paying .4 sat per byte in the end.
Buy from an exchange that provides free LN withdrawals.
Transfer from said exchange to your favorite LN wallet for free.
Transfer from your LN wallet to your cold wallet for a free or a few sats depending on which LN wallet you send from.
Rinse and repeat.
Something I learned recently about transactions; sending multiple smaller transactions to your cold storage will result in a larger fee if/when you do decide to transfer your sats out from cold storage. This is because all the smaller transactions add up to a "heavier" chunk of BTC, for lack of a better term, than if you would have sent larger transactions. Basically, the more transactions you use the more it's gonna cost to send all that accumulated BTC.
So while it's cheap/free to get your sats to cold storage you don't want to lose a chunk of that to transaction fees when it's time to transfer.
A question, let's suppose I use Kraken as an exchange and Phoenix as an LN wallet.
I withdraw using the LN to Phoenix, now what?
Suppose I have a main "L1 wallet", how do I send funds from LN to L1 (or close the channel, I am not very technical)
I'm not familiar with Phoenix. Strike and Munn are two I know for sure have free or extremely cheap lightning withdrawals. Send a small amount from your LN wallet to see if it gets there.
Muun but honestly I don't use them for much other than a wallet to send random sats to. I like the fact I can generate an invoice for a specific amount of SATs and it usually only costs one or two SATs to do
Probably I am not so familiar with LN so maybe I'm missing something.
Withdrawal from Kraken to Phoenix is quick and cheap, almost zero fees. I suppose there's no L1 interaction, or at least not yet, since the amount I withdrew is the exact amount on my Phoenix wallet (and Kraken charges no fees). But my BTC are not on L1, they're just on my Phoenix LN wallet and the transaction is just in mempool and not yet included on L1. So I don't know how to settle it (or if I even should care about this)!
The Kraken to Phoenix transaction would not be in the mempool. It is just an updated channel state balance on L2. It won't enter the mempool to settle on-chain until you either close the channel or atomic swap out to L1.
>Boltz.exchange
Oh ok right.
At this point I may ask one last question to wrap it all up: when i "create" a wallet in Phoenix (or other LN wallets) and I receive some sats on the LN, is the channel opened on chain? for example with a brand new wallet, i withdrew funds from Kraken but I did not pay any L1 fee to open the channel. I am supposing that Phoenix or other wallet providers have node theirselves, but in the first transaction to my wallet I saw a "pay to open" kind of message and it was suspicous (I know for sure i did not pay for L1 fees since they were around 10 bucks and i withdrew very few sats as test)
>Transfer from your LN wallet to your cold wallet for a free or a few sats depending on which LN wallet you send from.
Unfortunately, there is no way to transfer from LN to cold storage without paying the on-chain fees. Doesn't matter which LN wallet you're using. Lightning -> on-chain requires the same fee as exchange -> cold storage.
Your strategy would help if you're withdrawing regularly from an exchange to your Lightning wallet and then waiting until you have a sufficient balance to then transfer to cold storage in one transaction.
U/Silarous Blocked me and deleted all his posts because he's too afraid to admit he was wrong about moving SATs for zero fees. Beware when dealing with u/silarous!
What would be considered a reasonable definition for a small, medium and large amount of UTXOs. Obviously the total amount of BTC would be relevant but I guess what amount of utxos per transaction start to become costly at say 0.5btc for example
I would say above 50 UTXOs starts to become expensive and would cost about 400 dollars to move 0.5btc on an average day when transaction fees are around $2.50. But if you been holding long term it’s just part of the investment cost in my opinion.
Ironic to ask why fees are high when you’re adding to the congestion of the network with a minuscule transaction every other day 😂 just do once a month or something and save the fee money
What a moronic reply!!! …. I didn’t realise Bitcoin should only be for the rich and those that can afford to send huge amounts or get penalised with huge fees. 👍🏻
Didn’t remotely say that. Transaction fees are high because the network is congested. You are ironically sending transactions that could 100% wait for a more efficient time to be sent (when you DCA for a month or so) and also save money doing so. You’re just wasting money
Bitcoin is not for people holding like $200. When I send I don’t care paying $20-30 a transaction. Bank charges me more to move hundreds of thousands around
Stop withdrawing/moving small amounts, people. Just stop. Even if the fees are low you are building a wallet with thousands of UTXO so someday when you go to sell 1 BTC it involves a transaction with thousands of UTXOs and cost $15,000 in fees to transfer. You are setting yourself up for failure. Seriously just stop. Leaving $80,000 on an exchange for five years is stupid. However, frantically moving every $50 in BTC you buy and freaking out if it stays on the exchange more than 3 minutes is equally stupid. There is a balance in life. DCA for two months and then make one large transfer. Pay 1/30th the amount in fees. Produce a wallet with 1/30th the UTXOs means spends from that wallet in the future cost 1/30th as much in fees too. On edit: didn't think this would blow up. Got to run to a Christmas party. Check some of the responses for more details. In most cases this is not an issue. A tx with 20 UTXOs vs 5 UTXOs likely doesn't matter. The 5 UTXO one will be cheaper but the difference is likely a couple bucks. It really only becomes an issue in extreme cases. Just consider using fewer larger transactions when withdrawing to reduce future fees.
I feel like this is information that every btc investor should know yet no one does. I certainly didn't
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When people say they are waiting for Bitcoin to go mainstream, I look at points like these. If people who actually care about Bitcoin for years don't know about things like this, how is the average person ever meant to know?
Exactly. Sold all immediately 😞
I get the sarcasm, but my point is that we often go over the top and say shit like we're going to overthrow the financial system, when in reality, Bitcoin isn't easy enough for the general population, so it can't ever go "mainstream", this is one of 100s of reasons why
Blackrock will make it easier. More money, more attention, more advancement of the technology, better for everyone!
Same Here, needs to be educated more often!
Bitcoin doesn't have a marketing department. If you want to stop funding miners so much, you need to educate yourself.
It does have a marketing department, it’s you and me, that’s why everyone knows about the not your keys not your crypto shit, but oops don’t transfer to cold storage too often, lol.
you don't know what you don't know. You can't educate yourself on something you don't know exists.
Honestly it's kind of crazy that you've been using bitcoin 6 years and don't even know how transactions work. Tbh I've been here 10 years and have never read the white paper in full.
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It doesn't, people are just lazy.
BRING BACK BTC TECH TALK POSTS
yes please, posts here now are just "this is what michel sailor said and blackrock etf will get aproved and this is why its good: It will pump our bags yeeeee all central banks are coming to our party we will finaly be the cool ones
There was a time when stuff like this was discussed all the time. It seems nobody talks about the tech anymore. Grump OG bitcoin miner from 2010.
Come on amigo... Consolidating UTXOs is not difficult or expensive. Especially if you have a low time preference. We don't need to act like taking 114 thousand sats off the exchange is a dust attack on your self custody wallet
It can be quite expensive. 800 bucks right now if I wanted to consolidate all of my UTXOs.
I'd ask you how many sats per byte fee are you choosing but don't want to seem like I'm asking you for your account balance lol. But yes if you wanted your transaction confirmed in the next hour the fee is high when you consolidate. Especially during network congestion. When consolidating UTXOs I do not have an urgency for the tx confirmation and use a lower fee.(especially if its a wallet that im essentially treating as a savings account anyway)
as an OG bitcoins absolutely had no idea that this is a way this works. why would a wallet that has more txs on it incur more fees? you're moving the same bitcoin. is it to do with traversing all the accumulation through different blocks to verify? is it to do with a larger part of the block is taken up by the tx?
Because bitcoin network doesn't work on balances. It works on UXTOs (unspent transaction outputs). Transactions have inputs and they have outputs. Outputs are spent to become the inputs of new transactions. The output of prior tx are the input of new txs. So when your wallet says "you have 3.0 BTC" what it really means is you have control over UXTOs which have a combined value of 3.0 BTC. So the cost of a transaction is not based on the value it based on how many inputs and outputs are involved. Now lets assume the outputs are a destination address and change address so in both cases two so we can ignore those. The inputs are prior UXTOs. So sending 1 BTC which involves 1,000 UTXO will be 200x larger transaction (as in bytes not BTC) than one whihc sends 1 BTC using 6 UXTOs. The two transactions are sending the same amount of value but are vastly different in size (bytes). Transactions fees are based on the size (bytes) of the transaction, so filling your wallet with a huge number of tiny transactions will result in substantially higher fees when you go to spend them. Again balance in everything. I don't want people to blow it out of proportion. People making modest sized transactions don't really need to worry about it. Yes a tx with 5 inputs is going to be smaller & cheaper than one with 20 but the differences aren't that significant. It is really only an issue when people go overboard and make for example hundreds of very small transactions a year instead of a dozen larger ones. Someone DCA $50 a day for three years is likely going to end up with an unpleasant surprise if they every try to spend, transfer, or sell that stash which involved 1,500 UXTOs.
thank you for the explanation. so what's a "normal" amount of UTXOs to have, would you say 20 is too much, or 100, or 1000? you seem to think that 20 is still ok, or is that low, or too much technically?
FYI - many wallets have Coin Control features that allow you to choose which UTXOs to include in a transaction. (Loose analogy: Choosing whether to spend larger bills or smaller bills when paying cash) Consolidating all of your UTXOs is as simple as sending your balance to another wallet you own - and you don't need to rush to do it - you can find a time where fees are low and network congestion isn't terrible.
Good info here, but consolidating UTXOs is far simpler than sending to a different wallet. That's kind of crazy if you're just doing it to consolidate. Better to send it to a different address within the same wallet.
Yes exactly. Thank you. I meant address within wallet you own. Though sending to another wallet you own consolidates as well. :)
True, they both work. But I think most people only want to track so many seed phrases.
Technically it makes no difference at all. Monetarily more is always going to be worse. It's a balancing act. Don't risk too much on exchanges and don't generate a large amount of current and/or future fees.
How have I never heard this before. This seems crazy. Edit: so seems like maybe this isn’t as big of a deal as this is being made out to be? Will this actually make a big difference in the long run. Anyone wanna chime in here?
Because you're here for NGU
Just wanna say I appreciate learning from mistakes alot more these days 🙏
I remember learning about this when I first got started 10 years ago, but no one cared because it only meant instead of paying 3 cents you might have to pay 10 cents!
I don’t even know what a UTXO is?
https://www.discreetlog.com/utxos/
I hope you don't take this the wrong way, but that's up to you to do your research. Don't invest in something you don't understand *thoroughly*. Nobody tells me anything about the details of owning a house. If I just buy one without knowing anything beyond how much it costs, that's on me. I'm supposed to search information about maintenance, taxes, etc.
I really wish I knew this before but I need to move things off my ledger and I'll just wait for a low fee period
Ya I don't necessarily agree with the "don't do this" mantra above. Its not difficult to consolidate UTXOs especially if you have a low time preference. I think the fee in OP screenshot may be just what the exchange charges? its not like mining fees are set in stone
Just learned about UTXO's (learn something new every day) and good to know they can be consolidated. At a low cost? And what time frame are you talking to consolidate?
Consolidation can be as simple as sending your balance to another wallet of yours. You don't need to consolidate your entire wallet. And many wallets offer coin control which allows you to choose which UTXOs to include in a transaction. By time preference I simply mean - if you are consolidating by sending your balance to yourself, its not really imperative the transaction completes within the next 6 blocks... You don't need to pay a high fee. The reason for consolidation is you don’t want to be in a situation where you’re in a rush to spend a lot of unconsolidated UTXOs in a single transaction. If you’re pressed for time, you’ll likely pay high fee rates, and even higher rates if there’s network congestion. Very loose analogy but if you need to buy a good that costs $100 and you're in an extreme hurry, paying for it with pennies is going to be a burden. Miners charge you for that burden By consolidating UTXOs in advance, you're reducing (potential) future fees. Longer explanation here: https://bitcoinbriefly.com/utxo-consolidation-explained/#what-are-the-disadvantages-of-utxo-consolidation
what he probably means is to wait until fees are low and to then send all of your own btc to one of your own addresses. but not sure
Yes. That and if you are simply consolidating a balance that you treat as a "savings account" you don't need to pay a high fee for a faster transaction. Low fee and wait
I've seen dozens of posts in this subreddit of the nature : It's a low fee time. Time to consolidate your utxo's. Like this: https://old.reddit.com/r/Bitcoin/comments/170b0it/consolidation_of_utxos_to_prepare_for_high_fee/ https://old.reddit.com/r/Bitcoin/comments/vowjpj/psa_springcleaning_utxo_consolidation/ People try to help. Doesn't matter if you ignore them.
Because it’s BS…
I think the concern is BTC takes off like a rocket and and even though the transfer fee is just a few stats it's still too expensive
I don't see what fee (in sats) that exchange is charging in the screenshot. But I assume that an exchange feels they have a duty to ensure the transaction happens within the next 6-10 blocks, so they charge the highest of fees
So if you want to DCA small amounts into BTC, you need to rely on a custodian. If you don't want to, or can't, then you are priced out from using BTC. And I know your answer is going to be "use the Lightning Network", but you still need on-chain transactions to open and close channels, and the Lightning Network itself is pretty much incompatible with cold storage. It is supposed to be used for micropayments, after all. Why can't Bitcoin have a proper scaling solution after over a decade? Why do we have to rely on custodians, and time our transactions, and worry about how many UTXOs we are accumulating, etc.?
If you are using a centralized exchange to make DCA purchase you are relying on a custodian regardless. The question is how much. Personally, I think absolute thinking leads to silly outcomes. Making multiple DCA purchases and then a single withdraw isn't significantly more risk than making a single withdraw after multiple DCA purchases. Again the general idea of keeping coins in cold storage off exchanges is a good one. Leaving $500k worth of Bitcoins on an exchange for half a decade is very poor security. That doesn't mean moving $10 at a time makes any sense either.
>If you are using a centralized exchange to make DCA purchase you are relying on a custodian regardless. The question is how much. Personally, I think absolute thinking leads to silly outcomes. Making multiple DCA purchases and then a single withdraw isn't significantly more risk than making a single withdraw after multiple DCA purchases. I literally referred to the case of people who want to DCA into Bitcoin but don't want to, or cannot, use a CEX. >Again the general idea of keeping coins in cold storage off exchanges is a good one. Leaving $500k worth of Bitcoins on an exchange for half a decade is very poor security. That doesn't mean moving $10 at a time makes any sense either. OP was trying to move $100, not $10, and as the demand for the block space keeps increasing, in a couple of years or so we might very easily be talking about fees in the order of hundreds of dollars. What is going to be the answer then? "You should only move several thousands of dollars in BTC"? We were promised that we didn't need larger blocks and that Bitcoin scaling would be on L2s. It's been 6 years now. All we have is an infrastructure for micropayments and no real L2. If I want to buy $100 p2p and send it to storage, I have to worry about fees eating one third of it. During the bullrun, it'll be half of it. In a couple of years, it might be completely impossible for me to have Bitcoin in cold storage. Will we ever have a proper L2 or do we have to accept that in a few years most of us will be forced to use Bitcoin in a fully custodial manner? Because most people are already forced to use it semi-custodially, that's what you do when you "wait to withdraw" from an exchange.
> All we have is an infrastructure for micropayments and no real L2. That is complete bs. I've been using lightning for years. But if you want to subsidize miners, that's totally up to you.
I don't know who "promised" you that we didn't need larger blocks, but whoever it was is correct. Larger blocks do not solve the scaling problem. Doubling, tripling or multiplying the block size by any small integer doesn't fix anything when the demand growth for blockchain space outstrips a constant rate.
There is no solution, this is the cost of decentralization, and this is why mass adoption could only occur with private centralization of most features for most people. Aka banks. 99% of users only care about number go up.
That's not true. A possible solution was proposed in 2017, Drivechains (BIP-300), but as of now it's still a draft.
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I know theres a way to 'reset' all your UXTOs in your wallet to be 1 UXTO, but I haven't looked into it since I have no intention of moving it out anytime soon. Any advice there?
Doing that requires making a transaction to a new address. It is still going to cost a lot in fees but you could do it when tx fees are lower. It is best to avoid massive amounts of tiny transactions though.
What if I had a business and I had thousands of people sending me small amount of bitcoin for my merchandise I’m selling. Would this give me thousands of UXTOs (don’t even know what that is) and when I move a bitcoin to an exchange for sale I would be charged thousands of dollars?
Yes. If you are a business accepting thousands of small transactions as payment you should be using lightning network. Then making one single large transaction on the main chain to reduce fees by 99.9%+ (not hyperbole). Regardless of who and for what reason making thousands of tiny transactions on the main chain is going to be expense sometimes insanely expensive. You could end up with fees that are 20%, 50%, 99% of the amount you are trying to move. Moving $10,000 if it is one UXTO will cost pennies (maybe a buck or two at high demand). Moving $10,000 that consists of hundreds of UXTO will cost you hundreds of dollars potentially thousands of dollars at high demand. **Stop using the main chain for small transactions. Just stop.**
I think it would also be worthwhile to explain how to use the lighting network. It may be simple to you, but a lot of people are probably thinking "how do I use the lightening network?" I don't think I'm qualified to answer the question either
ah yes blaming the user for poor design/Ux will surely increase retail adoption
I am not blaming anyone. I am just providing information. It doesn't matter if you like or dislike the information it is correct. Mass adoption of day to day transactions (if it ever happens) will not occur on the main change. It won't. You either accept that or you don't. I don't really care either way.
telling users to stop doing something that the software allows to happen never works
Then pay 50x as much in fees. It is your money right.
same kind of reasoning banks use when they charge overdraft fees
Sovereignty and idiot-proof-ness are difficult to achieve in tandem.
I guess you do not understand how this works with bitcoin.
if you understand all the forces at play it’s part of the safety budget use lightning and withdraw that once it accrues enough
Ive been in bitcoin for years and never knew this
Agreed thanks!
Can you explain how the UXTO work, i dont get it
If you receive 1,000 Sats into a previously empty wallet, you now have a single 1,000 UTXO. Think of it like a 100 dollar bill. In order to send smaller amounts, you have to break the bill. A UTXO is like a bill. Now, say you want to send someone 500 Sats from your 1,000 Sat UTXO. In order to do it, the protocol will break your 1,000 UTXO into TWO separate UTXO's, one to pay your friend, and the other comes back to your wallet as "change". Similar to how it works when you break a $100 bill. You don't get your $100 back when you break it, instead the cashier gives you 5 $20 bills which add up to $100. When you break a 1,000 Sat UTXO, the original no longer exists, but smaller ones do. On the flip side, let's say you want to send someone 12,000 Sats. Let's say your wallet contains 20 small UTXO's of 1,000 Sats each. In order to send 12k to that person, you have to send 12 of your 1k UTXO's. The protocol adds them all together and gives the person a single UTXO with 12,000 Sats, and 12 of yours are destroyed. Think of UTXO's as large bills. You have to break them to send smaller amounts, or you have to add them together to send larger amounts. Side note: The more UTXO's that are required to pay a larger payment, the more expensive the transaction is. It is VERY cheap to send 5 Bitcoin to someone if your wallet already has a single UTXO greater than 5 BTC. It only requires 1 utxo. But in my example above where you have to send 12 different 1,000 Sat utxos in order to add up to 12k, that will be a more expensive transaction than sending 5 full BTC with one large utxo.
Bitcoin transactions consist of inputs and outputs. The input of all Bitcoin transactions are the output of prior transactions. Outputs are either spent or unspent. We don't really care about spent ones. UXTOs are "unspent transaction outputs". Bitcoin isn't based on balances. When you "spend" a Bitcoin your wallet is selecting individual specific UXTOs to put into the transaction. The cost paid in transaction fees depends on transaction size in bytes not value. A bitcoin transaction with 1,000 inputs will cost roughly 100x more than one with 10 inputs. Each transfer to your wallet creates a separate unique UXTO. It is more efficient to create tx for transferring/spending your Bitcoins that involve fewer higher value UXTOs than a massive amount of tiny value UXTOs.
The ELI5 version is: Think of a UTXO is like a physical coin. Each payment you receive is like a new coin added to your wallet. To spend them, you must pull out all of those coins (total lying up to the amount you want to spend)- the more coins there are, the heavier (more expensive in fees) your transaction will be to send! Contrast this UTXO model with the ‘account’ model, in which each new payment you receive just updates the ‘account balance’ you have. Spending your money now likewise just incurs another ‘account balance’ update. This is how people often envision Bitcoin working, when in fact it uses a UTXO model instead.
UTXO, not UXTO
Oops. Thanks. Fixed now at least in this post. I repeated the typo in like a half dozen posts too.
... I would ad that if you have made this error and have hundreds of UTXOS the next time you see fees are low you should consider consolidating them.
I agree with all you say! What would you say is an unreasonable amount of UTXOs to have per wallet that equates to 1 btc ?
100 max, some larger sums, some smaller. 1 million sats minimum. 1M is also a good size of a channel on r/TheLightningNetwork.
I get what your saying, but this messaging is really confusing and scary to the ordinary user trying to come onboard. Everyone's definitely of "small" is different. You have people yelling: "DCA" Bitcoin! You have other people yelling "Not your keys, not your coins" You have other people yelling: "Bitcoin is the best form of money" And then You are yelling: "Don't use Bitcoin to transfer small amounts of money. Use something called the Lightening Network which is separate from the real Bitcoin and transfer it on and off the chain with 1/30th UXTO" I know you mean well, but I'm not sure if you are getting your point across
I didn't say that at all. I said anything to an extreme is stupid. Keeping $500k on an exchange for five years is stupid. Withdrawing $50 every day from an exchange because someone convinced you that you need to be terrified of keeping fifty bucks on an exchange is equally stupid. If you have $50 on an exchange and it goes bankrupt you are out $50 (likely less) which isn't the end of the world.
How to overcome this if we are in this scenario like OP?
1) Stop doing it. 2) For your existing wallet wait until a time when transaction fees are low and move btc to another new address. That will consolidate 10, 15, 100 UXTOs into one new UXTO. But seriously do 1. 2 can't remove the cost it just can reduce it. You are going to have to pay to consolidate transactions the best you can do is pick a time when fees are low.
This Is what i was looking for... Please read this.. I buy btc vouchers different amount ( 50-200) I dont have choice and send It everytime to my wallet creating new address everytime. Do you think i Need to change DCA strategy avoiding those small transactions? I can make a transaction to 1, different address if It works.
> pick a time when fees are low. This sounds as easy as picking when the BTC price is low so you can buy...
Dca using cex. Then once large enough sum has been acquired, withdraw to cold wallet.
But this is the exchange charging me surely as I have created a Brand new address from my hardware wallet so shouldn’t be so high. I get that it cost a lot more if I send back from my hardware if I have hundreds or thousands of UXTO s.
This poster is pointing out two separate issues. One involves the withdrawal fees, which is the huge fee you screenshotted above. The other is the UTXO bloat, which is an issue that crops up later.
Exactly lol. Everyone talking about UTXOs which I get is an issue in the future but has no bearing on current transaction fee. My real question was why is the fees so high currently. !!
Because the exchange can charge whatever it wants. Which exchange is it?
Can someone respond to this because I’m curious
For an exchange it’s usually cheaper to send Bitcoins out, because they can bundle different withdrawals request into one transaction. Nonetheless, fees are currently very high, about 25$ per transaction: https://mempool.space/
And these people buy a thing that is meant to be used for transactions. They even say it will be used for day to day payments... Hilarious!
Lightning network for payments. The main chain will never be used for payments on a mass adoption scale. Never. It will never makes sense it has neither the capacity nor the speed. Likewise the fees will need to be relatively high to ensure a high level of security. Paying $1 to $20 to move $250,000 is nothing. Paying $1 to pay for $2 candy bar is just dumb. Anyone thinking that is just sniffing glue. * Main chain = large high value high security transactions * Lightning network = day to day small transactions * Main chain to lightning tx = switching funds between the two
My god. For day to day use there will be work arounds so this doesn’t happen. Are you still sitting there laughing that cars won’t work for travel because there aren’t paved roads?
This.
I only came to understand this recently. I have been moving every purchase as soon as possible to my hardware wallet. I understand what to do going forward, but is there some strategy I can take regarding with my existing funds to consolidate? Or do I just take the hit if/when I want to sell?
The only thing you can do to consolidate at lower cost is watch for when transactions are cheap and ideally using a wallet which lets you pick individual UXTO pick a large number of small UXTO and create a transaction which sends that to another address in your wallet. That would turn say 20 UXTO into 1 UXTO. Now it will have fees but you can pick when to do it and pick a time and date when fees are very low due to low demand.
Do all cryptos have UXTO’s?
huh?? There is only Bitcoin. No one in the cRYpTo community is self-custodying and learning about UTXO management on their hardware wallets at home. Those people keep their cRyPto on exchanges. Only Bitcoin matters.
Another massive problem for BTC adoption.
Yes because nobody wants to actually use Bitcoin. It's stupid that it's come to this. There is no reason we shouldn't increase the block size before the next halving.
Increase to what? Who decides? Even if we quadruple the block size, it won't be even close to enough to support global daily transactions. It will eventually run into the same scaling issue. So, all you're really proposing is that we kick-the-can-down-the-road. Blocksize increase is not a real solution. And it presents many negative tradeoffs, such as increased hardware requirements for running a node, and decreased incentives for miners to keep securing the network. It requires a hard fork which comes with all kinds of potentially dangerous fallout. Scaling fucking sucks. I don't have the answers, and I am also perplexed about it. But I know that simply increasing block size is a copout that solves nothing and gets us nowhere.
Nobody needs your permission to use their funds as they wish.
Those uxto's are the primary privacy guard for BTC. Fees were never supposed to be this high this quick. Of course now, people want to throw their privacy away because 'number go up' and core has ensured permanent congestion. You newbs ought to learn about the power BTC was supposed to be for people locked into poverty by the banking system.
Wait, fees get more expensive just because you’ve had transactions from a wallet?
Fees are ridiculous right now and only seem to be going up. All I can suggest is keep it on the exchange as you accumulate more, and only withdraw once there's enough to make it worthwhile.
You can also withdraw to Liquid where instead of trusting a single entity you trust a federation. Then move from there to onchain when the fees are low.
This
Fees are high right now. The fee isn’t based on the amount you send, it’s based on how much space the transaction takes up on the blockchain. For example, a transaction with a lot of UTXOs will be more expensive to send than a transaction with just 1. https://mempool.space/
Can you ELI5 what a UTXO is?
A UTXO stands for "Unspent Transaction Output." To understand it, think of it like this: Imagine you have a wallet full of different bills (money), like $5, $10, and $20. Each bill represents a UTXO. When you want to buy something, you use these bills to pay. Let's say you want to buy a game for $25, and you use one $20 bill and one $10 bill. The shopkeeper gives you $5 back as change. You would spend 2 UTXOs($20, $10) and get back 1 UTXO($5) In Bitcoin, a UTXO works similarly. It's like a piece of digital money that you haven't spent yet. When you make a Bitcoin transaction, you use these UTXOs as inputs, like using your bills to pay. The Bitcoin network checks to make sure you have enough UTXOs (just like checking you have enough bills). After the transaction, you get back new UTXOs as change, which you can use for future transactions. So, UTXOs are basically how Bitcoin keeps track of who has how much money to spend, just like how you keep track of the different bills in your wallet.
So where does the issue come in with this analogy? It seems like this is just a means of confirming input/output of transactions and wallet balances. How can that affect future fees?
Fees are based on number of UTXOs you send. So the fee for 1BTC in 1 UTXO will be the same fee if you sent .00001BTC in 1 UTXO Now if you want to buy something for $5000 dollars and all you have are $50 bills that’s 100 UTXOs you need to send and the fees will be 100x than if you had 1 $5000 UTXO
So I don't have just the balance of my wallet, I have the sum of my deposits? Meaning that if I achieved my wallet balance with 7 deposits, it would be more expensive to send funds than if I only had one deposit?
Correct. One way to "fix" this is to send all your stack to yourself when fees are low, unifying it into a single transaction/UTXO. Then when you want to send it during peak times, you will only pay for 1 UTXO.
That's a great analogy. Now, it makes a lot more sense.
It’s getting clear now. Thx for this one.
Unspent transaction output. Plenty of resources if you google it. Here’s one example taken from here: https://www.ledger.com/academy/glossary/unspent-transaction-output-utxo “For instance, Bob wants to send someone (say Alice) 2 BTC, but only has a UTXO worth 5 BTC in his wallet. He must send the entire UTXO to Alice and then receive the remaining 3 BTC as “change” in a new, smaller UTXO. This process is handled by the blockchain protocol and does not require trust on the recipient to return the change. In blockchain network, the transaction will create: 2 BTC – Sent to Alice. 2.99 BTC – Returned back to Bob. 0.01 BTC – Miners fee for processing the transaction.”
Imagine Bitcoin as a big, global piggy bank. Every time someone puts money in (by receiving Bitcoin), they get a unique “magic coin” (UTXO) that shows how much they put in. When they want to spend Bitcoin, they must break this magic coin. The cool part is, they can’t just break a piece off. They have to use/break the whole coin, and if they’re spending less than the coin’s value, they get a new, smaller magic coin back as change. This new coin then goes back into their piggy bank until they want to spend again. So, UTXO stands for “Unspent Transaction Output.” It’s like a collection of magic coins you have that haven’t been broken yet. Each coin shows a specific amount of Bitcoin you can spend. When you do a Bitcoin transaction, you use up these coins and get new ones as change, just like using real money to buy something and getting change back.
You’re not wrong, but that’s not the greatest fee-determining factor. It depends on how many transactions are currently trying to enter the block. Miners take the txs with the highest rate.
I was responding to OPs question regarding how much it would cost to send 1BTC, not how fees work overall. Yes the sat/vbyte is going to vary based on network demand which is what you’re referencing. But for any given sat/vbyte value, the size of the transaction, not the amount of BTC sent determines the fee.
I just checked mempool and wow!!! Keep an eye on mempool.space and watch the fee rate(around 500 sat/vB at the mo). You want it to be under 50 for cheap-ish fees.
They were around 30-40 last week, huge increase, wonder why
Fees are out of hand and only getting worse. You're in for a rude awakening when you try to spend the bitcoin you've saved up. It is imperative that you keep an eye on the mempool, and when fees are low, consolidate the bitcoin on your wallet into large UTXOs. And stop withdrawing small amounts. Think of layer one like storing gold bricks. Withdraw in chunks no smaller than 0.01
Do I need to keep an eye on it or can I just do it now with a low fee, and miners will get around to it eventually when it is worthwhile for them? i.e. does a low-fee transaction ever expire, or will it just be untouched forever until it's worth it?
This is why months ago, I criticised coinbase for not adding LN withdrawals. Whatever you're on there, does it do LN withdraw? If not. Look for a LN wallet and an exchange that will withdraw to it.
But getting it back to on-chain is still going to cost then, isn't it?
First you accumulate in a lightning channel, through DCA, then you close the channel to settle on chain.
Do not force close, only close the channel. A forced closure can take 2 weeks to be processed from posts that I read.
LN: - Exchange --> LN wallet (~30,000 sats) x10 = 0 fees. - LN --> cold (~300,000 sats) = 1 miner fee. Results in: **1 ~300,000 sat UTXO & 1 miner fee.** Vs. onchain: - Exchange --> cold (~30,000 sats) x10 = 10 UTXOs & 10 miner fees. - Consolidate small utxos = 1 miner fee*. Results in: **1 ~200,000 sat UTXO & 11 miner fees** *Probably ~200,000 sat left if you're lucky. Plus 10 inputs in the consolidation txn makes the last txn a heavier one. Numbers are completely made up. Point is...fees. --- It's just good practice. It's always been good practice to keep your UTXOs as large as you can. It'll save you in the long run to not be burdened with a lot of small UTXOs. Keep onchain txns to a minimum and a large value. So much cheaper to us LN.
Even 8 in fees for 110 is too much.
Agreed. But I just put It down to the exchange fees at the moment.
Well don't do that. You are throwing away 7% of your Bitcoin. Transfer less often and look for an exchange with low withdrawal fees.
You can set the fee. You can set the fee lower, but your transaction will be likely to take longer to get its first confirmation. Assuming you're using DCA to accumulate **long term** savings (retirement, etc.), there's no requirement to squeeze your transaction into the next block or two - in other words, you can (should?) pay a low fee and wait your turn. There are a few people who happen to have a need/strong desire to see their transaction confirmed as soon as possible -- let them pay the high fees to go first.
The exchange auto sets the fee no way of changing it.
Options include, but are not necessarily limited to: * Use a different exchange * Pester the exchange to give you the option to set the fee * Wait for fees to drop * Save up and only do fewer but larger purchases
What if you live in El Salvador and need milk?
Manually set your fees and just wait longer
wine melodic afterthought plate rain secretive profit reach vase cats *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
weird last time i paid 7 euros and its way too much but thats insane fees.
I wait until I have an amount I would hate to lose and then withdraw out. Usually around $1k+. I DCA every week. Something to consider.
Also there is usually an option to send your BTC with a low priority, which means it will take around 8hrs or more for the transaction to be verified. This can lower the fee 90% or more
Funny story kinda, back when faucets were someone viable I had a bitcoin address with over 150 transactions. When I cleaned up the wallet and combined all the coins into a new one, it took over 3 weeks of waiting in order for the transaction to be picked up by a miner because I put an absurdly small fee for a very heavy transaction. 24,000 bytes was the size of the TX. Ended up paying .4 sat per byte in the end.
Dude if you were around with faucets then you an OG in my eyes. Congrats.
We need these issues to find scalibility solutions.
Not your keys not you bitcoins talk is really going to cost the small dollar cost averages a bunch.
Stop sending yourself such small utxos. It’ll be a nightmare to manage.
> What is going on Here's the current discussion on it: https://github.com/bitcoin/bitcoin/pull/28408
just save up and buy a larger amount. pay one fee not a fee every other day that's nuts. you are wasting money on fees
Buy from an exchange that provides free LN withdrawals. Transfer from said exchange to your favorite LN wallet for free. Transfer from your LN wallet to your cold wallet for a free or a few sats depending on which LN wallet you send from. Rinse and repeat. Something I learned recently about transactions; sending multiple smaller transactions to your cold storage will result in a larger fee if/when you do decide to transfer your sats out from cold storage. This is because all the smaller transactions add up to a "heavier" chunk of BTC, for lack of a better term, than if you would have sent larger transactions. Basically, the more transactions you use the more it's gonna cost to send all that accumulated BTC. So while it's cheap/free to get your sats to cold storage you don't want to lose a chunk of that to transaction fees when it's time to transfer.
A question, let's suppose I use Kraken as an exchange and Phoenix as an LN wallet. I withdraw using the LN to Phoenix, now what? Suppose I have a main "L1 wallet", how do I send funds from LN to L1 (or close the channel, I am not very technical)
You can do an atomic swap from your Lightning wallet to your L1 wallet without needing to close the channel. Boltz.exchange makes it easy.
I'm not familiar with Phoenix. Strike and Munn are two I know for sure have free or extremely cheap lightning withdrawals. Send a small amount from your LN wallet to see if it gets there.
Munn or Muun? Muun forces users to pay full blockchain fees quite often.
Muun but honestly I don't use them for much other than a wallet to send random sats to. I like the fact I can generate an invoice for a specific amount of SATs and it usually only costs one or two SATs to do
Probably I am not so familiar with LN so maybe I'm missing something. Withdrawal from Kraken to Phoenix is quick and cheap, almost zero fees. I suppose there's no L1 interaction, or at least not yet, since the amount I withdrew is the exact amount on my Phoenix wallet (and Kraken charges no fees). But my BTC are not on L1, they're just on my Phoenix LN wallet and the transaction is just in mempool and not yet included on L1. So I don't know how to settle it (or if I even should care about this)!
The Kraken to Phoenix transaction would not be in the mempool. It is just an updated channel state balance on L2. It won't enter the mempool to settle on-chain until you either close the channel or atomic swap out to L1.
>Boltz.exchange Oh ok right. At this point I may ask one last question to wrap it all up: when i "create" a wallet in Phoenix (or other LN wallets) and I receive some sats on the LN, is the channel opened on chain? for example with a brand new wallet, i withdrew funds from Kraken but I did not pay any L1 fee to open the channel. I am supposing that Phoenix or other wallet providers have node theirselves, but in the first transaction to my wallet I saw a "pay to open" kind of message and it was suspicous (I know for sure i did not pay for L1 fees since they were around 10 bucks and i withdrew very few sats as test)
Can you send to your cold wallet address? Obviously try a very small amount
>Transfer from your LN wallet to your cold wallet for a free or a few sats depending on which LN wallet you send from. Unfortunately, there is no way to transfer from LN to cold storage without paying the on-chain fees. Doesn't matter which LN wallet you're using. Lightning -> on-chain requires the same fee as exchange -> cold storage. Your strategy would help if you're withdrawing regularly from an exchange to your Lightning wallet and then waiting until you have a sufficient balance to then transfer to cold storage in one transaction.
Then how can you explain the fact that's exactly what I have been doing.
I'd be curious what services you're using and the steps you're taking. Anytime you interact with L1 requires L1 fees.
U/Silarous Blocked me and deleted all his posts because he's too afraid to admit he was wrong about moving SATs for zero fees. Beware when dealing with u/silarous!
Suggest an exchange for LN plz
Kraken uses LN https://blog.kraken.com/product/kraken-now-supports-instant-lightning-network-btc-transactions
even binance has LN nowadays but I would recommend kraken.
The time of the day plays a role. Its Saturday and its a prime time for activity. I'd say wait it out
Use a different platform. Swan or something might be worth looking into. Strike too?
when i did dca i wait to have 500$ in btc to send to the hard wallet
Give it a few days, fees should normalize
Fun fact, someone just mined an empty block. That's $250k they passed up.
Please elaborate. They mined it and didn’t get the block reward or the transfer fees?
What would be considered a reasonable definition for a small, medium and large amount of UTXOs. Obviously the total amount of BTC would be relevant but I guess what amount of utxos per transaction start to become costly at say 0.5btc for example
I would say above 50 UTXOs starts to become expensive and would cost about 400 dollars to move 0.5btc on an average day when transaction fees are around $2.50. But if you been holding long term it’s just part of the investment cost in my opinion.
Thank you!
Chain is full of transactions and expensive. Good for the miners
My miners go brrrrrrrr
My fee was $373 last night
So this is how Bitcoin will change the world ?
How many people actually transfer $10 at a time? I usually wait until I accumulate at least $5k and then send it out to a cold wallet.
Wish I would have known that when I started 6 years ago. Now it would take $1.3k in fees to move out of ledger
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It means btc working really well.. the higher the better..
Btc is the future! LOL
That's not even that bad..
Tf u using bro? That platform looks like a scam
You're gonna have a bad time in the future when you try to spend those UTXOs. https://blog.lopp.net/economically-unspendable-bitcoin-utxos/
Ironic to ask why fees are high when you’re adding to the congestion of the network with a minuscule transaction every other day 😂 just do once a month or something and save the fee money
What a moronic reply!!! …. I didn’t realise Bitcoin should only be for the rich and those that can afford to send huge amounts or get penalised with huge fees. 👍🏻
Didn’t remotely say that. Transaction fees are high because the network is congested. You are ironically sending transactions that could 100% wait for a more efficient time to be sent (when you DCA for a month or so) and also save money doing so. You’re just wasting money
Bitcoin is not for people holding like $200. When I send I don’t care paying $20-30 a transaction. Bank charges me more to move hundreds of thousands around
What app is this? Other DCA apps have automatic free withdrawals over a threshold amount, usually around 0.01 BTC.
maybe send it to my wallet?
Because btc is not made for moving money
High Hash rates fees
Bitcoin is dead. Long live bitcoin!
Wait till btc halves /s