Question About UTXOs Consolidation \ stacker news ~bitcoin

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1639 sats \ 52 comments \ @0xbitcoiner 28 Nov bitcoin_beginners

My wallet doesn't manage individual utxo's but I'd like to consolidate them. Question: let's say I have 21 utxo's at different addresses (1, ..., 21) but in the same wallet. My idea is to send the entire balance to address 1 (including the balance of address 1). I think this would be fine, but I'd like to hear from more experienced stackers. Thanks!

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228 sats \ 8 replies \ @DarthCoin 28 Nov

My wallet doesn't manage individual utxo's

It means you are using the wrong software.

0 sats \ 0 replies \ @zapsammy 29 Nov

it always amazes me how embarrassingly low is the level of bitcoin knowledge in our meetup, and then i remember that the education meetup topics still focus on either:

why bitcoin? or
how to bitcoin like a pro!

the teacher shud look at himself daily in the mirror and ask himself why does he suck so much. 🔍😅

0 sats \ 0 replies \ @JesseJames 28 Nov

Amen to that!

0 sats \ 0 replies \ @TNStacker 28 Nov

This

0 sats \ 4 replies \ @0xbitcoiner OP 28 Nov

In the case of this particular wallet, which I only use for nostr and sn, I'm using electrum for android (mobile as a cold wallet). Do you know of a wallet for android that allows you to manage utxo's individually?

84 sats \ 3 replies \ @DarthCoin 28 Nov

Electrum for android also have coin control. Only that is not so intuitive like on desktop. You will have to go and select each output from previous transactions and freeze some. You can use the same seed on a desktop Electrum and do the coin control from there, or using Sparrow.

Bluewallet for mobile also can handle that seed and have decent coin control. For mobile you have also Green, Nunchuck, Keeper with good coin control.

Practically if you do not touch LN with those UTXOs, you can import the seed in any other wallet app and manage it from there, consolidating, organizing, coin control etc. Sparrow is the best for that.

20 sats \ 2 replies \ @0xbitcoiner OP 28 Nov

I've seen this button there (freeze) but I've never actually looked at what it does. I think it's time I checked it out.

edit: cc/ @DarthCoin

What does it mean to “freeze” an address in Electrum?

When you freeze an address, the funds in that address will not be used for sending bitcoins. You cannot send bitcoins if you don’t have enough funds in the non-frozen addresses.

https://electrum.readthedocs.io/en/latest/faq.html#what-does-it-mean-to-freeze-an-address-in-electrum

This option is not fit for purpose. It actually does what I thought it did!

0 sats \ 0 replies \ @DarthCoin 28 Nov

the easy way: just import the seed into a desktop app and take it from there.

0 sats \ 0 replies \ @0xbitcoiner OP 28 Nov

I think I see what you mean. I can freeze the utxo's I don't want to send and then send the others.

33 sats \ 0 replies \ @Jon_Hodl 28 Nov

Depending on the size of each UTXO, I would keep them between 1 million and 10 million sats.

If you consolidate them all into a single UTXO, then you run the risk of compromising your privacy/security later when you send and unknowingly create a specific type of address cluster called peeling chain. https://www.whatisbitcoin.com/learn/what-is-an-address-cluster

Also, I if you decide to consolidate them into more than 1 single UTXO, I would consolidate them into a new address(es) 22, 23, 24, etc… in your wallet.

If you want to get real experimental with consolidation, you can consolidate with a CoinJoin to make it more difficult for CA companies to follow the money on-chain.

42 sats \ 9 replies \ @aljaz 28 Nov

its always tempting to consolidate but depending on their privacy level you might want to have several utxos instead of one - you dont necessarily want to share all of your activities with everyone, or even leak the amount of bitcoin you have by joining all of them

0 sats \ 8 replies \ @0xbitcoiner OP 28 Nov

I have several wallets, this one I only use for nostr and SN.

47 sats \ 7 replies \ @aljaz 28 Nov

then generate a new recieve address in the wallet and just send everything to it

0 sats \ 6 replies \ @0xbitcoiner OP 28 Nov

This is in line with my doubts. I can send the entire balance (utxo 1..21) to address 1. There's no need to create a new address. Or am I missing something?

102 sats \ 4 replies \ @aljaz 28 Nov

lets invert this - why are you insisting on reusing an address when you can generate a new one for free?

there is absolutely 0 upside to doing it your way, there is some upside to doing it the "right" way. at least you get a clean new utxo and potential change of ownership since its a new address.

0 sats \ 0 replies \ @DarthCoin 28 Nov

yeah I also don't get why he insist in sending back to address 1. It doesn't make sense.

0 sats \ 2 replies \ @0xbitcoiner OP 28 Nov

I have an explanation for this, I don't know if it still makes sense to think about it but in the past I've read several times that some wallets don't work well with derivation paths. And it can lead the user to think that they have lost their funds.

66 sats \ 1 reply \ @aljaz 28 Nov

first of all if you have the seed then who gives a shit, you can always access it with a working wallet.

secondly i'm not sure how generating a new address would cause issues for the wallets (given that you are not generating 10k addresses) and what do derivation paths have to do with that, you're not changing a derivation path by generating a new address, and even if you'd be creating a new "account" and generating an address there then you'll get the funds there.

so in any case i think this entire thread should be addressing your real question - can something go wrong with sending all utxos to a new address in android for electrum, not trying to reason why the plan you had in your head is the right one

0 sats \ 0 replies \ @0xbitcoiner OP 28 Nov

I seem to be confusing derivation paths with generating new addresses. What I've read in the past has to do with what you're saying about generating lots of addresses. Thanks for your patience and explanations.

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11 sats \ 0 replies \ @poe7645 28 Nov

Sending to a new address adds (some, not much) plausible deniability it wasn't just sent to a new owner. Sending to a previously used address ensures that it's visible the original owner is the recipient.

If you're consolidating I would just generate a new address anyway, rather than reuse an old one. There is no downside to generating a new address, the fees will be calculated by the number of inputs, the output is still one either way.

21 sats \ 0 replies \ @OT 28 Nov

Consolidating might be good for future fees, but your privacy is sacrificed (they are now all linked).

Other comments are correct in that you should not use the same address twice. Get a new address and consolidate if you must.

11 sats \ 0 replies \ @Carresan 28 Nov

So much to learn from this conversation. Thanks to everyone!

46 sats \ 16 replies \ @ch0k1 28 Nov

Address reusage is considered as a bad practice!

I would send all the UTXOs to the 22nd address

0 sats \ 15 replies \ @0xbitcoiner OP 28 Nov

If it's bad practice, for privacy reasons, won't I still be 'exposed' by sending all the utxo's to another address, even if it's a new one?

10 sats \ 14 replies \ @ch0k1 28 Nov

No, you won't if it's a new address.

151 sats \ 13 replies \ @0xbitcoiner OP 28 Nov

I think you're wrong. When consolidating utxo's, the sender and recipient are exposed on the blockchain. Are you sure?

10 sats \ 12 replies \ @ch0k1 28 Nov

What do you mean by exposed on the Blockchain?

0 sats \ 11 replies \ @0xbitcoiner OP 28 Nov

recorded and available for others to watch.

0 sats \ 10 replies \ @ch0k1 28 Nov

Bitcoin and generally cryptocurrency Blockchains are public ledgers so recorded and available for others to watch are fundamental features in everyone of them.

What I meant by reusing addresses is a bad practice for privacy was basically described here

140 sats \ 9 replies \ @0xbitcoiner OP 28 Nov

So that means you were wrong when you said it:

No, you won't if it's a new address. #786171

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0 sats \ 0 replies \ @bitalion 29 Nov

One question, you say you have a wallet that doesn't have coin control. You have a BIP39 recovery phrase. Because if that's the case it's very easy to restore that wallet in a wallet that does have this function.

0 sats \ 1 reply \ @JesseJames 28 Nov

Why? As long as it is in one wallet, you are OK. Technically, you should be using one transaction per address. I know people don't practice that, but it's good advice. You own millions of addresses. Why is that a problem? What are you trying to solve?

0 sats \ 0 replies \ @0xbitcoiner OP 28 Nov

there's no problem and i'm not trying to solve anything. i've been enlightened by the stackers' explanations. if you read the comments you'll understand.

0 sats \ 0 replies \ @DesertDave 28 Nov

I have a lot to learn. 😬

0 sats \ 8 replies \ @Rsync25 28 Nov

You should use HD hierarchical wallet and avoid reusing address

42 sats \ 7 replies \ @0xbitcoiner OP 28 Nov

For privacy reasons? 👀 #786123

21 sats \ 6 replies \ @Rsync25 28 Nov

I mean, using small amounts instead of large. Step by step. One thing additional is use CoinJoin service too

0 sats \ 3 replies \ @Artilektt 28 Nov

What's available for CoinJoin with whirlpool gone? Only one I'm aware of is Jam/Joinmarket

96 sats \ 2 replies \ @Rsync25 28 Nov

Joinstr and coordinators of Wasabi individuals, beyond JoinMarket.

0 sats \ 1 reply \ @Artilektt 28 Nov

Do you happen to know of any good resources about these options or how to use them?

21 sats \ 0 replies \ @Rsync25 28 Nov

https://joinstr.xyz/ and https://wasabiwallet.io/

0 sats \ 1 reply \ @0xbitcoiner OP 28 Nov

I don't understand. What does this have to do with reusing addresses? In this wallet I have multiple utxo's below 1M sats and I want to keep utxo's above 1M.

21 sats \ 0 replies \ @Rsync25 28 Nov

It is a bad practice. Using CoinJoin and small amounts can help avoiding chainalysis. Transferring all UTXOs in one single transaction, all stay linked.