How to break down UTXOs for cold storage (what sort of values?)

[Calculus99]

Hiya

I've got 5 Bitcoins, collected over the years and want to put them all into cold storage for the next several years and not touch them.

I fully expect fees to be much higher over the coming years and was wondering if I should split the 5 BTC into a series of much small UTXOs?

Anyone got any views on this and if so what would be a good and sensible plan.

Thanks

[1715177513]

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[AB de Royse777]

if I should split the 5 BTC into a series of much small UTXOs?

Well my understanding is that if you have only one input in a tx then the cost goes the lowest. So I would recommend only one UTXO which means send all the 5 btc in one address using one tx. This way when you will decide to spend them then you are going to have only one input.

[Pmalek]

I agree with what Royse777 said. If you expect the fees to go higher it doesn't make sense splitting your Bitcoin now and using multiple inputs during a bull run for example when prices are higher. You will end up paying more in fees. It is a better idea to consolidate your inputs into one 5BTC input when transaction fees are low.

[Calculus99]

Thanks guys, but what about privacy in relation to that single 5 BTC UTXO?

Say in 5 years I want to send someone 0.05 BTC wouldn't they see I have 5 BTC (now 4.95).

Wouldn't it be better to say have 4 separate 1 BTC UTXOs and perhaps 20 x 0.05 UTXOs. Then in the future if I want to spend a bit here and there I can use the one of the smaller UTXOs or combine a few of them etc.

Thanks once again for your ideas.

[BrewMaster]

Say in 5 years I want to send someone 0.05 BTC wouldn't they see I have 5 BTC (now 4.95).

yes they will see what input you spent which would tell them the amount you had and where you sent the remainder to. and if that kind of privacy is important to you then splitting makes sense otherwise i can't think of any reason.

just remember that if you decided to do that then don't use single key cold storages like a private key printed on a paper. use a deterministic wallet for example you can generate a wallet using Electrum and print the seed phrase. then split your bitcoin among multiple addresses. this way you only have to backup one thing and in the future when you spend X amount of coins your change address is also recoverable using the same seed backup.

[o_e_l_e_o]

and if that kind of privacy is important to you then splitting makes sense otherwise i can't think of any reason.

Security would be a reason to split them. 5 BTC in one address, be that a paper wallet or an airgapped device, is a single point of failure or a single point of theft for your entire holdings. I would split it in to at least a couple of parts, spread across different paper wallets or airgapped devices.

Say in 5 years I want to send someone 0.05 BTC wouldn't they see I have 5 BTC (now 4.95).

Yes. But lets say right now you split the 5 BTC in to 4x1 and 20x0.05 like you suggest. In 5 years' time when you spend 0.05 BTC, the receiver only has to go back a single transaction to see the 0.05 was split from 5 BTC and could make a reasonable conclusion from that. At some point along the line you are going to want to mix your coins to obfuscate how much you are holding.

[hatshepsut93]

What is the biggest amount you ever going to send in a single transaction? If Bitcoin would reach $100,000, would you send all 5 BTC in one transaction to an exchange to sell them? Conventional wisdom proves that you can never go wrong witch splitting your transactions into smaller batches - this way if you encounter a scam exchange, or you'll get blocked for KYC, or if there's a security breach, or you make a mistake and get phished - in all those cases, splitting your transaction would make you lose only a part of your money.

So, if you, let's say plan to sell exactly 0.5 BTC at a time, then it would make sense to hold your UTXO's in those amounts, since you would pay the same fee as if you had only 1 UTXO but was sending multiple transactions. Of course having only 1 UTXO allows greater flexibility, but having many UTXO and in different wallet files could boost your security. 5 BTC is a large sum, if I owned that much, I would worry about security much more than about potential fees.

[BrewMaster]

and if that kind of privacy is important to you then splitting makes sense otherwise i can't think of any reason.

Security would be a reason to split them. 5 BTC in one address, be that a paper wallet or an airgapped device, is a single point of failure or a single point of theft for your entire holdings. I would split it in to at least a couple of parts, spread across different paper wallets or airgapped devices.

true but it adds a lot of unnecessary complications in my opinion. you'll have to do the same process multiple times and encrypt each paper wallet with a unique complicated (strong) password and backup that password too. so you'll soon end up with a pile of papers that you need to store in different places.

not to mention that finding a safe place to hide the paper wallet is another issue. where shold it be hidden? at home? at someone else's home? can you trust them? in a safety deposit box? how much will it cost to store each in a different one? does the cost justify the result?...

[Calculus99]

Brew, hats and o_e, all really helpful replies, got me thinking, just what I wanted.

Thanks a lot.