There are various ways to manage UTXOs manually too, in terms of batch sending and even having several wallets that might have varying balances of bitcoin in various UTXOs, so even within a wallet there might be several accounts and within an account there may be several UTXOs, and we can manage our UTXOs with coin control.
So if I am going to buy some furniture from a store and it costs something like 0.011432973 BTC for the whole purchase and maybe I have a wallet that has an account that has several different sizes of UTXOs, so I utilize coin control to send from a wallet that has some slightly higher balance.
Or maybe I have time to pay in advance, so I end up selecting from a wallet that has .079342152, and so I decide to send 3-4 transactions simultaneously, so the recipient cannot determine which of the UTXOs are under my control and which of the UTXOs are not, yet sometimes we still might want to be careful about having transactions in the same hop, so we might want to have an extra hop in there so that, the transaction is sent from even a smaller wallet that is closer to the size of the transaction, so then the recipient sees the transaction coming from a smaller wallet. We could also use lightning network, and there are more and more tools coming available to obscure bitcoin transactions. Some folks choose to use a wallet from an exchange, which sort of defeats part of the purpose of peer to peer transaction, even though it could be useful in some cases to use exchange wallets that would not show our own personal account balances.
Not many users truly understand how much metadata they leak by just casually spending without considering UTXO structure or coin control. Your example perfectly Explains why intentional input selection matters, not just for privacy, but also for avoiding dust, minimizing change, and protecting spending patterns. The part about sending multiple transactions or routing through an intermediate wallet is a clever tactic. Many still underestimate how powerful an extra hop or even simple wallet separation can be in breaking heuristic assumptions used in chain analysis.
As Bitcoin matures, I believe privacy conscious behavior like this will be more crucial, especially with increasing surveillance and blacklisting on chain. Tools like the Lightning Network and even collaborative coin joins like Whirlpool or JoinMarket also deserve more adoption among users who care about fungibility....
Another thing is that maybe you have a UTXO that is decent size (maybe around 0.7 BTC), and then maybe in June 2024 you send a transaction but you send two to yourself.. .. That then becomes 1) 0.27234954 self 2) 0.1943275 self 3) 0.0032764 (transaction) 4) 0.23769546 change You then have 3 UTXOs instead of 1.
Maybe in December 2024 you have another transaction that you would like to make, so you decide to take from the first UTXO, and you end up splitting it the same way, two to self 1 transaction and change.
Maybe in June 2025, you have another transaction and you are going to send to 3 family members (it will have a total of about .00432 in the transaction), yet you still choose from # 4 UTXO that had been created in June 2024... So you would have three transactions to your family members, and maybe 1 or 2 to yourself and change. With the passage of time, you might have some UTXOs that have sat for several years since they were last touched... and sure it can be a bit of work to send to several different wallets or accounts within wallets, and it can also be a bit of work to keep track of these... Some of the wallets, UTXOs might be more in cold storage and other wallets might be hot wallets, yet of course, we will suggest to keeps smaller amounts on hot wallets, you can still have some wallets you consider to be intermediate wallets.
That’s a very good breakdown. A lot of people don’t realize how their UTXOs can start to stack up and spread over time, especially if they have been using Bitcoin for a while across different cycles. What you explained is exactly how it happens..... one transaction here, another there, and before you know it, you have several small UTXOs in different wallets.
I also like the point about keeping some wallets as intermediate ones. It makes a lot of sense to have levels between hot and cold storage, depending on how often you plan to use the coins. Keeping track of all this might seem like a lot, but if someone is serious about holding long term, this kind of planning will really help later....
It’s small details like these that really show the maturity of a Bitcoin user. You are not just holding, you are managing your stack with long term clarity. Thanks for sharing that, it reinforces why thinking in UTXOs, not just BTC balances, matters a lot......
There can be situations when people end up sharing too much, and even if I do a bitcoin transaction with a friend in 2017, yet if I do not move the change address, the transaction in 2017 might have been worth a couple thousand dollars (1 or 2 bitcoin) and maybe my change was a couple thousand dollars (1 or 2 bitcoin), but then that balance of 1 or 2 bitcoin is now worth way more than what it was worth in 2017, and many folks do not even have 1 or 2 bitcoin, even though prior to 2017, we might have had been transacting with several bitcoin at at time, especially if we might have made some large purchases with bitcoin, we may have sent several bitcoin for a transaction that was a couple thousand dollars.
This really highlights how drastically Bitcoin’s value has evolved over time. What used to feel like casual transactions like sending 1 or 2 BTC for basic purchases now seem like moves worth a small fortune. It’s crazy to think that something as simple as not moving your change from a 2017 transaction could mean you are still sitting on a huge balance today without realizing it....This is why Bitcoin truly rewards time and patience and why being cautious with past addresses and transaction history is more important than ever.
Guys who have been in bitcoin for a while have these kinds of stories, including that in 2015 (when BTC prices were around $250) they might have had like a few thousand dollars on some hot wallet (and maybe it was too much?) and maybe they had $15k or $20k in some wallet that they considered a bit more secure, but surely not totally secure.
But then when bitcoin prices went up to $19,666 within 2 years, they might not have had kept their security at the place that it should have had been, so then the few thousand in the hot wallet might have had turned into $100k or $200k... .. and the larger amounts of $15k to $20k might have turned into more than $1 million. .. since the price rise was around 78x in about 2 years.
Similar things happened in 2021, yet the price rise was ONLY around 16.5x in 2.5-ish years... so 2021 was a bit less extreme as compared with 2017.. and surely the rise in 2013 was even greater,.. since it was a rise of more than 200x in the period from 2012 to the 2013 peak.
Yeah, stories like this are part of what makes Bitcoin so wild and interesting. Back then, a few thousand dollars in a wallet didn’t feel like much, but once the price shoots up 70x or more, that same wallet suddenly feels like a vault. It is easy to forget how fast things can change and how fast we can get caught off guard if we are not managing risk properly.......
A lot of people learned the hard way that security should grow with your stack. What felt secure enough at $250 per BTC didn’t hold up when BTC hit $19k or more. And yeah, while 2021 didn’t feel as crazy as 2017 or 2013, the gains were still life changing for many. These cycles really do teach us, not just about holding, but also about how to stay prepared when success shows up faster than expected.......
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This cycle is the beginning for some, and so yeah, anyone new to bitcoin likely will need to spend a whole cycle or a few cycles building up his bitcoin stash, and it tends to take a decent amount of time to build a bitcoin stash, even if a person is relatively focused on accumulating bitcoin.
Many people underestimate the time and consistency it actually takes to build a meaningful Bitcoin position. It is not just about catching the perfect dip or riding one bull cycle, it is about developing the mindset to accumulate steadily, even when the hype dies down. Every cycle teaches something new, and those who stay committed through the quiet phases are usually the ones who end up with the strongest hands and the biggest rewards in the long run. This current cycle could be the proving ground for a lot of new entrants.....
There could be a lot of guys who don't necessarily want to get focused on making money, but then when they figure out bitcoin is a great place to put any extra money that they are able to generate, then they may well become motivated to make more money and even save more money by spending less, and then they suddenly feel that they have identified a place in which they are able to put their extra money and not feel like it is losing value and/or feel that they have to spend it right away in order to preserve its purchasing power.
A lot of people don’t start out thinking about wealth building or financial discipline, but once they understand Bitcoin potential, everything changes..... Suddenly, every bit of extra cash feels like an opportunity rather than something to spend immediately. It flips the script, instead of money burning a hole in your pocket, you start seeing sats as something worth stacking and protecting.
Bitcoin quietly trains people to value their time and money more and that’s something no fiat system really encourages.......