As far as UTXOs go, that's a paradigm I don't quite understand yet.
I thought I was doing a good thing by buying Sats whenever I got paid, but now some are telling me that is a bad thing. This is worrisome.
There is no problem as you are accumulating it on exchanges. Some people are doing it and as the money reach higher amount, they withdraw to their noncustodial wallet.
If you are using a noncustodial wallet is what people are talking about. Let us say you send 0.001 BTC to your wallet, it will require you less amount of transaction fee when you want to transfer it to another person compared to if 0.0005 BTC is sent to your wallet two times. The more number of times you are sent bitcoin, the higher would be the fee if you want to spend all the UTXOs.
Do not be confused about what UTXOs are. If you are sent bitcoin just 1 time, that is 1 UTXO. If you are sent bitcoin 2 times, you have 2 UTXOs. If you are sent bitcoin 3 times, you have 3 UTXOs and so on. But you can spend the UTXO one by one or combine some UTXOs to spend them. Go to Electrum testnet and be sending testnet coin to yourself to understand it better. As you are sending testnet coin to yourself, be checking coins which you can enable after you click on view.
And 'Consolidating Inputs' ...I have no idea what that is.
I guess I truly am a newbie when it comes to BTC *facepalm*
You can read this LoyceV guide for it
[May 2024] Fees are low, use this opportunity to Consolidate your small inputs