Bitcoin Transaction Fees and UTXO Management
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- when bitcoin blocks are full, highest fee transactions are confirmed first
- pending transactions sit in node mempools awaiting confirmation: can conceptualize mempools as a line to enter a restaurant sorted by who is willing to pay the most
- your bitcoin wallet may show a single balance but the reality is that it is made of many different unspent transaction outputs (UTXOs)
- when you make a bitcoin transaction your wallet will select as many UTXOs as necessary to reach the amount of bitcoin you wish to send
- onchain transaction fees are calculated based on size in bytes not the amount of sats sent
- the more utxos required on the input side the higher the fee paid
- from a cost perspective you want to consolidate utxos, fewer utxos with larger amounts
- consolidation has privacy tradeoffs though: you link any UTXOs you consolidate as owned by the same person + larger UTXOs mean you will dox more of your stack to anyone you pay in the future

Therefore you want to reduce the number of UTXOs you have while being mindful of the privacy concerns.

Lightning Transaction fees are calculated differently: based on the amount in sats sent. Opening lightning channels when fees are low can enable you to save money in the future when fees rise. 🤙

https://werunbtc.com/utxos


Sparrow wallet great software to visualize and manage your UTXOs!


Sparrow is the best and there is no second best.


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nice summary of onchain transaction knowledge!


based, me too!


I would add that having a large variety in UTXO sizes is preferred because you can select the UTXO that is just slightly larger than the transaction you are trying to make. Best of both worlds lowest fees and best privacy


I don't get the argument of "consolidate for cost"

You still have to pay, the only difference is whether you pay now or pay later. Assuming you can't time the market for fees, why is now preferable to later?


And for mobile?


the thought is fees will rise over time with adoption, if you do not expect that to be the case then there is no cost savings consolidating preemptively


Why do bitcoin wallets even need to consolidate?

Could they just auto coin control?

Could a posted QR be used to generate QRs that can be used by the sender wallet to coin control to the receiver?

More fees, but better privacy?


mobile there is no clear best, there are a bunch of good wallets with different tradeoffs

my favorite mobile on-chain wallet is samourai, but that is android only, without lightning support

other good options:
muun - extremely easy to use - https://werunbtc.com/muun
phoenix - great for lightning payments - https://werunbtc.com/phoenix
bluewallet - many features, easy to connect to your own node, can be used with multisig
breez - similar to phoenix, great for lightning, with a slick point of sale mode
zeus - the best way to use your own lightning node
blixt - great for lightning
nunchuk - nfc support so works well with tapsigners, easy multisig, iOS version is closed source


Great summary on tx fees

#[0]


This is good quality content.


If KYC-compliant Bitcoin from multiple addresses are consolidated onto a single address on the Lightning Network, is there still traceability when these coins are transferred back to a new address?


THE NOSTR REPORT

WHAAATZAAAP
Mar 3, 2023
Block Height:  779,175
Moscow Time: 44:95 ⚡/ $

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🎙Quote of the Day🎙
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NOT 🔑 YOUR 🗝 KEYS🔐
NOT🔑 YOUR🗝 COINS🔐
#[0]
#[1]
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🚨Headline Nostr News🚨
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Yesterday, #[2] rallied the #plebchain troops to stress test #[4] by creating a "Zapathon" #[5] While zaps reached an impressive 1200/hr, @WoS responded "What is this... a stress test for ants??" 🐜🐜 #[6]
Zapathon part 2 starts today at 5pm EST. This is the thread where it's all going down: #[7]

#[8] Germany's declares gains on bitcoin tax-free after 1-year holding period. ₿✨
#[9]

#[10] welcomes his competition to iOS. Check out the Nostur App by #[11] which features: multiaccount, zaps, bookmarks, storage of your posts on your device, and more. Remember to practice safe nSECs when testing new clients! 🔐Available on TestFlight here: https://testflight.apple.com/join/TyrRNCXA
#[12]

#[13] shares awareness of a glitch that takes Nostur users out of Damus when clicking users or notes. 🥷
#[14]

#[15] According to zaplife.lol, there has been 68,720,958 sats zapped in the last week ⚡ #[16]
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🏝Nostrica Update🏝
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#[17] shares 🥩 news 🥩 about #Nostrica
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💻nostr Tech💻
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#[20] Amethyst update announced. Markdown supporters rejoice! 🎉🟪
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#[22] Are you a blogger or looking for bloggers on Nostr? 💬 Check out: https://habla.news and https://blogstack.io 📰
#[23]

#[24] launches La Casa Nostr 🏡, a new NIP-05 service which comes with a private relay. No passwords, no email address required, sign in with your lightning wallet. ✍⚡
https://lacosanostr.com
#[25]

#[26] wrote an article that also includes perspective on Nostr. 💜
#[27]

#[28] NostrPlebs.com announces new paid relay beta service for verified NostrPlebs NIP-05 users. ✔
#[29]

#[30] Zaps⚡ for free? Alby team opens a direct Lightning channel with LightningTipBot. ⚡🐝 #[31]
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⚡nostr Business⚡
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#[32] Proposed Florida bill would require bloggers writing about Governor to register with State. 🏈
https://www.wfla.com/news/politics/florida-bill-would-require-bloggers-who-write-about-governor-to-register-with-the-state/
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#[34] Tips for managing Bitcoin UTXOs and transaction fees. 👩💻
#[35]
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🔥🔥Meme of the Day🔥🔥
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#[36] Harebone
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Stay Classy Nostr.


Soon! Or not so soon.
satsigner.com


The features in samourai are enough to get an android phone, just to get the best mobile wallet ever made.