Seb Bunney -- 2y For example, if we receive $100 worth of Bitcoin today, we'll have a UTXO for 0.0015 Bitcoin. Essentially, this UTXO represents unspent Bitcoin in our wallet awaiting use— hence the name. 🧵6/15 reply [1 reply]For example, if we receive $100 worth of Bitcoin today, we'll have a UTXO for 0.0015 Bitcoin. Essentially, this UTXO represents unspent Bitcoin in our wallet awaiting use— hence the name. 🧵6/15
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root 174c61a9…3ba3 · depth 6 · · selected c5c86567…b89f
Unsure what a #Bitcoin UTXO is, why they are important to understand, and how managing UTXOs could save you alot of #BTC in the future? 🧐Here's a 🧵 for you!UTXOs, or Unspent Transaction Outputs, can be tricky to grasp, so let's do a UTXO 101.
Bitcoin transaction fees aren't based on the amount sent, but on the transaction's weight. More data in thetransaction equals higher fees.You're probably thinking, what is Seb on about... "what does transaction weight mean?"🧵2/15
If you pop over to http://mempool.space (@mempool), you'll notice fees are quoted in "sat/vB", which stands forsatoshis per byte. Since there are 1,000,000 bytes in a megabyte, and blocks have a maximum size of 4 megabytes,each block has limited space.🧵3/15
The more space your transaction takes up, the more expensive it will be.Let's break down a hypothetical transaction: If your transaction is 250 bytes in size & the current fee rate is10 sat/vB, then your fee (250 x 10) would amount to 2,500 sats or approximately $1.29.🧵4/15
You're probably wondering, "What factors contribute to increasing transaction size?"One of the primary factors is UTXOs (Unspent Transaction Outputs). When Bitcoin enters our wallet, a UTXO isgenerated.🧵5/15
For example, if we receive $100 worth of Bitcoin today, we'll have a UTXO for 0.0015 Bitcoin. Essentially, thisUTXO represents unspent Bitcoin in our wallet awaiting use— hence the name.🧵6/15
Bitcoin transaction fees aren't based on the amount sent, but on the transaction's weight. More data in the transaction equals higher fees.
You're probably thinking, what is Seb on about... "what does transaction weight mean?"
🧵2/15
Seb Bunney -- 2y [parent] | reply [1 reply]If you pop over to http://mempool.space (@mempool), you'll notice fees are quoted in "sat/vB", which stands for satoshis per byte. Since there are 1,000,000 bytes in a megabyte, and blocks have a maximum size of 4 megabytes, each block has limited space. 🧵3/15
Seb Bunney -- 2y [parent] | reply [1 reply]The more space your transaction takes up, the more expensive it will be. Let's break down a hypothetical transaction: If your transaction is 250 bytes in size & the current fee rate is 10 sat/vB, then your fee (250 x 10) would amount to 2,500 sats or approximately $1.29. 🧵4/15
Seb Bunney -- 2y [parent] | reply [1 reply]You're probably wondering, "What factors contribute to increasing transaction size?" One of the primary factors is UTXOs (Unspent Transaction Outputs). When Bitcoin enters our wallet, a UTXO is generated. 🧵5/15
Transaction weight/size grows with the number of UTXOs involved. Imagine having 10 UTXOs of $10 each and needing to send $100 to a friend. Compare this to having a single UTXO of $100 for the same transaction.
🧵7/15
