Wallet resp. Address Consolidation

[_typer_]

Hi, the next halving ahead I'm getting a little troubled about a couple dozen addresses with one UTXO each containing more or less just dust (I know the term is inappropriate, but only 5-8 USD worth each atm). I'm using Electrum and could mark these addresses to „combine“ them sending to a new address (preferably same wallet).

Disregarding the privacy issue my question is: would this make sense considering that transaction fees might (most probably will) get higher after the halving?

Thankful for opinions and input!

(Please excuse my english but I won't use a translator for this).

[1714530953]

1714530953

[Zaguru12]

It definitely would make sense consolidating when the mempool becomes less congested say close 3 sats/vbyte which is something we are closer to at the moment.

The halving period or after it doesn’t necessarily mean that the transaction fee will get higher, high transaction fee is mostly caused by a congested mempool. Although since after halving the bitcoin price pumps many take their profits resulting into many transactions that in turn increases congestion in the mempool and thereby increasing the fees. The only thing guaranteed after halving is the block reward reduction or halved.

[_typer_]

It definitely would make sense consolidating when the mempool becomes less congested

Thank you for your fast reply - actually been waiting for that to happen, hopefully it's not too late with the BRC-20 Token (of which I'm not a fan to be honest) here to stay.

But I get the message and I'll wait.

All the best to you.

...say close 3 sats/vbyte which is something we are closer to at the moment.

The halving period or after it doesn’t necessarily mean that the transaction fee will get higher, high transaction fee is mostly caused by a congested mempool...

As I understand it the fees are calculated per UTXO, so stuffing many of those into one transaction could blow up the fee I'd pay while each of them is almost just "dust". Please correct me if I'm wrong.

[hd49728]

Transaction fee will be paid in bitcoin but with same amount of satoshi you pay for transaction fee, its value will be different with Bitcoin price. Like 2000 satoshi when Bitcoin was at $2000 will be cheaper than when Bitcoin is at $26,000 recently.

So if you have bitcoin in your non custodial wallet, you can consolidate your UTXOs when you see chances to do consolidation with good fee rate. If you use centralized exchange account, you will pay more expensive cost for consolodation and with small fund, withdrawal fee will be very expensive cost.

As I understand it the fees are calculated per UTXO, so stuffing many of those into one transaction could blow up the fee I'd pay while each of them is almost just "dust". Please correct me if I'm wrong.

It is correct but if your fund is small, you can do only one trasaction, consolidate it to a new address which will be used to trade or to receive more transactions later.

If that fund is too small, you should not consolidate it, pay on chain transaction and later will have to move it again, pay on chain transaction fee again.

[Findingnemo]

Currently, your transaction will get confirmed with 6sat/vbyte.

So you can even consider consolidating the fees now which is 8 inputs and one output the fees will not be outrageous and we never know when the mempool will get clogged so waiting until the next halving to save a buck or two isn't worth the wait.
Using Bitcoin Fee Calculator to estimate the fee of your transaction which is 0.00006752 BTC = $1.8 if UTXOs are from Segwit (P2SH)

[hosseinimr93]

Hi, the next halving ahead I'm getting a little troubled about a couple dozen addresses with one UTXO each containing more or less just dust

Take note that even if you had received all those UTXOs at the same address, you still had to pay the same fee.

If you use centralized exchange account, you will pay more expensive cost for consolodation and with small fund, withdrawal fee will be very expensive cost.

If you have bitcoin on an exchange and you want to withdraw your fund, you pay a fixed withdrawal fee and it doesn't matter how many deposits you have made. Therefore, it doesn't make sense to talk about consolidation cost when withdrawing from an exchange.

[_typer_]

If that fund is too small, you should not consolidate it, pay on chain transaction and later will have to move it again, pay on chain transaction fee again.

Been using Electrum for some years now (never leave anything on an exchange), just worrying about the addresses with a small fund in one UTXO. But I get the point - paying transaction fee again. I'll keep watching the mempool and do some testing when the time feels right, there might be no really final answer, so it's up to me to ease my worries.

Thank you very much.

[nakamura12]

...say close 3 sats/vbyte which is something we are closer to at the moment.

The halving period or after it doesn’t necessarily mean that the transaction fee will get higher, high transaction fee is mostly caused by a congested mempool...

As I understand it the fees are calculated per UTXO, so stuffing many of those into one transaction could blow up the fee I'd pay while each of them is almost just "dust". Please correct me if I'm wrong.

You won't be paying high fees now as the mempool is not congested and the lowest fees right now is 6 sats/byte so, I would say consolidating the UTXO right now won't be a problem unless the mempool is congested with many transactions that will result in higher fees compared to the fee before. I haven't tried what you are planning but I did tried sending 5-10 usd worth of bitcoin. Right now, the fee for a transaction is at 8 sats/byte as I am writing this.

[hopenotlate]

If you are not in a hurry to consolidate your email inputs you can take advantage of the current fairly cheap fees or you can also set a 1/2 sats fee and wait if your tx gets eventually included in a block following this this very well written guide; but be sure to use a wallet supporting RBF feature in case you need access to those Btc earlier than planned.

[hosseinimr93]

or you can also set a 1/2 sats fee and wait if your tx gets eventually included in a block following this this very well written guide;

Currently, all nodes that are using the default setting has reached their maximum mempool size and they don't relay your transaction if you use such a small fee rate.
And even if you can successfully broadcast your transaction with the fee rate of 1-2 sat/vbyte, it's very unlikely that it will be confirmed. Most probably your transaction will stay unconfirmed and most nodes will drop it from their mempool after 14 days.

[_typer_]

Currently, your transaction will get confirmed with 6sat/vbyte.

So you can even consider consolidating the fees now which is 8 inputs and one output the fees will not be outrageous and we never know when the mempool will get clogged so waiting until the next halving to save a buck or two isn't worth the wait.
Using Bitcoin Fee Calculator to estimate the fee of your transaction which is 0.00006752 BTC = $1.8 if UTXOs are from Segwit (P2SH)

https://www.talkimg.com/images/2023/08/23/MvN9C.png

Isn't worth the wait - ok, I'm convinced. Guess I myself got clogged worrying about dozens of UTXO with a small fund. Actually I use the Bitcoin Fee Calculator you mentioned, it's great.

I'll do it.

Thanks to everybody! Great response for a new member, I appreciate it!

[EL MOHA]

Been using Electrum for some years now (never leave anything on an exchange), just worrying about the addresses with a small fund in one UTXO. But I get the point - paying transaction fee again. I'll keep watching the mempool and do some testing when the time feels right, there might be no really final answer, so it's up to me to ease my worries.

If you’re not in a hurry since this utxo are just little amounts you could wait a little bit to consolidate. Last weekend I saw the fee at around 4sats/byte so wait on and keep checking fee estimators.

As I understand it the fees are calculated per UTXO, so stuffing many of those into one transaction could blow up the fee I'd pay while each of them is almost just "dust". Please correct me if I'm wrong.

Bitcoin transaction fee are calculated according to the size of each UTXO, it is total fee= total transaction input (utxo) size + output size= fees. Imagine the byte of each utxo is 100 (even signature verification included) and you have total of 8 utxo then the input size totals to 800, then the output byte which is say 32 then 800+32 will give 832 which is the total bytes for your transaction. Then you set the transaction fee at 4sats then consolidating them will be like 4x832= 3,328sats/bytes as your transaction fee

[BitMaxz]

Isn't worth the wait - ok, I'm convinced. Guess I myself got clogged worrying about dozens of UTXO with a small fund. Actually I use the Bitcoin Fee Calculator you mentioned, it's great.

The  Bitcoin fee Calculator from Coinb.in is not as good as the mempool.space suggested fee and as you can see on the tool under outputs there is no Segwit.

If I were you follow the suggested fee from mempool.space if you don't want a stuck transaction. The fee calculator from Coinb.in is not as accurate as mempool.space.

[hosseinimr93]

The  Bitcoin fee Calculator from Coinb.in is not as good as the mempool.space suggested fee and as you can see on the tool under outputs there is no Segwit.

There is no native segwit (P2WPKH) output in coinb.in fee calculator, but you should get a very good estimation if you choose p2sh output instead of that.
For every native segwit output you add to your transaction, the size increases by 31 vbytes. Coinb.in estimates that for every p2sh output that is added to the transaction, the size increases by 32 vbytes and you can choose that option whenever you have a native segwit (P2WPKH) output.

[LoyceV]

I created a topic about this, read Fees are low, use this opportunity to Consolidate your small inputs!

would this make sense considering that transaction fees might (most probably will) get higher after the halving?

In my experience, it's useless to try to predict fees far in the future. If you have inputs around ~0.0002BTC now, and they're Segwit, you can consolidate them for about 3% of the value of your inputs. If that's worth getting peace of mind: go for it!

a couple dozen addresses with one UTXO each containing more or less just dust

For next time: try to avoid creating dust inputs. Either consolidate them right then, send them elsewhere, or combine payments to avoid small change.

[_typer_]

I created a topic about this, read Fees are low, use this opportunity to Consolidate your small inputs!

would this make sense considering that transaction fees might (most probably will) get higher after the halving?

In my experience, it's useless to try to predict fees far in the future. If you have inputs around ~0.0002BTC now, and they're Segwit, you can consolidate them for about 3% of the value of your inputs. If that's worth getting peace of mind: go for it!

a couple dozen addresses with one UTXO each containing more or less just dust

For next time: try to avoid creating dust inputs. Either consolidate them right then, send them elsewhere, or combine payments to avoid small change.

Thanks for the link - will read with interest.

"I prefer to "Enable coin control" in Bitcoin Core, you can do this in Electrum too. Select the inputs you want to use, and leave out very small dust inputs (say 0.00001BTC, it would still cost more in fees than it's worth). Then simply send all selected inputs to a new address of your own.I prefer to "Enable coin control" in Bitcoin Core, you can do this in Electrum too. Select the inputs you want to use, and leave out very small dust inputs (say 0.00001BTC, it would still cost more in fees than it's worth). Then simply send all selected inputs to a new address of your own."

The inputs in question result from a time some years ago and now I know it was plain ignorancy on my part not to consolidate them right away. Electrum generates a new address for receivements by default so I didn't really care (think about it) at that time. By now addresses have piled up a bit so I thought it might be a good idea to do it before the next halving. Now I've learned that the halving will not necessarily result in higher fees so I've calmed down a bit overnight.

Actually I'm now asking myself where would this end? After having consolidated inputs < 0.0004 BTC what will come to my mind next - consolidating inputs < 0.004 BTC ? and then inputs < 0.04 BTC ? Completely disregarding privacy is not really appealing after all...

I'll take my time now and wait for the moment to do what seems right.

Once again thanks to everyone for the helpful comments!

[LoyceMobile]

Actually I'm now asking myself where would this end? After having consolidated inputs < 0.0004 BTC what will come to my mind next - consolidating inputs < 0.004 BTC ? and then inputs < 0.04 BTC ?

It depends on how you spend your Bitcoin: for Bitcoin coffee you can use small inputs, but if you're buying a car it's going to be a problem.

[hosseinimr93]

Electrum generates a new address for receivements by default so I didn't really care (think about it) at that time.

I think you missed my reply.
Electrum generates a new address due to privacy reasons and take note that even if you had received all the transactions at the same address, you still had the same number of UTXOs.
When it comes to transaction size and the fee you have to pay, it's the number of UTXOs that matters, not the number of addresses you are spending fund from.

[_typer_]

I think you missed my reply.
Electrum generates a new address due to privacy reasons and take note that even if you had received all the transactions at the same address, you still had the same number of UTXOs.
When it comes to transaction size and the fee you have to pay, it's the number of UTXOs that matters, not the number of addresses you are spending fund from.

Sorry I didn't answer your post directly - I'm aware of what you stated, that's the reason I wrote about UTXOs in the beginning.

Thanks for your comment and have a nice day.

Edit: Just read my first post again and you're right - it led to this misunderstanding.

[o_e_l_e_o]

Actually I'm now asking myself where would this end? After having consolidated inputs < 0.0004 BTC what will come to my mind next - consolidating inputs < 0.004 BTC ? and then inputs < 0.04 BTC ? Completely disregarding privacy is not really appealing after all...

I keep a variety of input sizes.

There's no point having all your holdings in one or two large inputs of (say) >5 BTC. What happens when you want to buy something for 20 bucks? You have to use a big input, creating a big change output, and causing problems for the privacy of all that change. Similarly, there's no point having all your holdings in small outputs since you will have to pay higher fees when you want to make a larger purchase.

So keep a range of outputs. You say your outputs are in the range of $5-8 each. Might you use bitcoin to buy a coffee, some fastfood, a month of a VPN subscription, or something at a similar price range? It so, it's fine to keep those outputs as they are since you can spend them as they are. If not, then consolidate them. Now you've got an output of (say) $50. It's reasonable to think you might want to spend bitcoin on something around that price in the future, so it's reasonable to keep an output of that size.

And if you have a range of outputs, then it's easier to make transactions which create no change and therefore not run in to the problem of lots of small outputs needing consolidated in the future.