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@ LawnShark
2025-05-19 18:56:20
Consolidate them when fees are low. You send yourself a transaction that uses several small utxos so you get a bigger one.
Fees are directly proportional to the amount of inputs, so the same transaction pays less fees if it only uses a single utxo instead of several. As fees rise, the smaller utxos become unspendable because the fee rises until it covers the whole utxo value.
It's also a good idea to have multiple utxos rather than one, since paying reveals the value of that utxo and you probably don't want anyone you transact with knowing everything you have.
Keeping that balance between multiple utxos and big utxos is what is called "utxo management"