Topic: [Aug 2022] Mempool empty! Use this opportunity to Consolidate your small inputs! - page 18. (Read 88519 times)

Before I opened this topic, it would have been dust:
If that happens again, you'll just have to wait it out.

As long as you're not in a hurry, that works. I'm still waiting for lower transaction fees myself.

Many companies overcharge their customers, but wasting money still costs them money.

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Consolidations are going to take a while. I noticed bc1qwkpdjeatdwrpv4vu4mj84ee6vkn96vdz2drfsn is filling many blocks consolidating 0.000049999 BTC inputs at 7.28 sat/vbyte. The transactions all have >1000 inputs, weigh about 75 kvbytes, and send 0.05 BTC. The address received 8.6 BTC in total, so that makes about 170 large consolidation transactions (assuming all inputs are the same size, it's hard to see that many inputs on a block explorer).
How did this address get all those inputs? It came from transactions like this one, which paid $20 at 199 sat/vbyte for something that looks like Ordinal dust spam. Maybe the 4999 sats were a payment for some "service" related to the Ordinals? I don't know, but someone no doubt earned a lot of money from this.

Exchanges tend to overcharge their customers, so it's not like they care about being thrifty.

Looking at my situation, I have a bunch of UTXOs that are .0004 BTC and up, so my fears of everything turning to dust are not as dire as I thought. I am thinking of holding out waiting for something like a fee rate of 6 sats and just get it done. There are 3 UTXOs that are below .0004, one is .00008, I'll make sure I don't burn it.

If you have to consolidate small inputs at higher fees, at least omit the inputs that aren't worth the fee. This transaction for instance paid 25.1 sat/vbyte for 698 multisig inputs. That's about 3250 sat per input. It includes inputs as low as 0.00001308 and 0.00001498 BTC, which at this fee adds a negative value to the transaction. They're literally burning money to remove money from their wallet.
Several other inputs pay a very high percentage of that input in fees. It would be much better to wait. I assume this is an exchange using an automated system, and it's amazing they still haven't figured out an algorithm that doesn't waste money (and block space). And at higher transaction fees, the amount of wasted inputs only goes up.

There is no "one answer" for this: it depends

If you're always using your largest input to make small payments, the other party knows you own that much Bitcoin. If you're okay with that, your largest input keeps getting smaller. If, in the future, you want to make a large payment, it's cheaper to have one large input than having to use several smaller ones.
I would use small inputs for small payments. If you have enough of them, you may be able to use one without creating any change at some point. Or, my other favourite: combine payments so you have no change left, for instance by topping op a VPN or hosting balance. That way you're effectively making the small dust someone else's problem.
At current fees, I wouldn't worry too much about using 2 inputs when making a transaction. It's not ideal, but the cost isn't that high either.

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Earlier today, fees were slowly dropping and months old consolidation transactions paying 7.05 sat/vbyte were getting confirmed. Mempool.space's Mempool Goggles was filled with nice consolidations cleaning up mempool. There were barely any "Data" transactions waiting.
Now, it looks completely different:

It's so obvious it's just one person doing this. Someone creates thousands upon thousands of BS transactions sending Bitcoin dust and pays millions upon millions of dollars in fees. Nobody in their right mind would do that if they don't earn more from it, so this can only mean someone is still earning shitloads of money from selling BS to gullible FOMO people.

Yeah, I plan on consolidating once fees are lower. Just thinking about ways to reduce the amount of potential dust.

Well, if you have many UTXO and also spend a lot, sooner or later you can easily end up with small inputs off this, so you still have to consolidate now ant then.
The strategy is not very bad, but not the best either. However, I feel that the problem of small inputs is coming more from how you earn/get to your custody those UTXO (so you may not be in real danger).

Since I have - now and then - to convert Bitcoin into fiat (sadly), one strategy I take is that when I have to spend I pick some 1-2 UTXO with the sum not that far from the amount I need, and the change I send to the centralized wallet that I use to convert to fiat (not nice, but meh).

While I am waiting for lower fees, I want to prevent having small UTXOs in the future.

I think the correct strategy is to always spend from the UTXO with the highest amount of bitcoin. Is there is a flaw in this strategy?

All my BTC is KYC.
I don't engage in any illegal activity.
I don't have enough BTC to worry about people knowing my balance (well below 1 BTC).

You're double counting block rewards. If you spend 0.2BTC per block to raise fees by 0.4 BTC per block, and mine 1 out of 3 blocks, you're losing 0.2BTC per block you mine.

Apart from the math, with different numbers this may work in the short-term. But in the long-term, if you're spending 0.2BTC per block on raising the fees, and your competitors spend 0.2BTC per block on buying new mining hardware, you're on the losing end.

Hmm, now that I look again, this is way weirder than at first, maybe the labels are wrong?
1Kr6QSydW9bFQG1mXiPNNu6WpJGmUa9i1g is labeled as Bitfinex
https://bitinfocharts.com/bitcoin/address/1Kr6QSydW9bFQG1mXiPNNu6WpJGmUa9i1g
3929qmbYYxAST12ceKRWKxcRFwXNnrXnfE
https://bitinfocharts.com/bitcoin/address/3929qmbYYxAST12ceKRWKxcRFwXNnrXnfE

I'm saying that because what they are doing is really strange, they have >20 000 transactions like that, and this looks more like an old tumbling mixing error than anything else and this has been going for 8 days, kind of impossible for an exchange not to see it.


That's the big IF Phil, because if the amount of tx you need to create and mine yourself is just too big compared to the natural activity you will end up mining your own fees and little else, losing 1 block of 8 sat/vb fees for 1/10 of a block of 10 sat/vb fees.
And right now, as we actually mine 8sat/vb there is no demand for that block space, all weeknd and stuff.

And your evidence to support this claim is... ?

First of all, let's define what it means to "raise the fees". A miner cannot force a user to raise their transaction fee. A miner can only express their disapproval by not mining transactions paying less than x sat/vb. But, this gives their competitors the option to earn those fees. And since Foundry controls 33% of the hashrate, then it is a matter of time until transactions paying less than x sat/vb are mined by the rest 66%.

Related topic: What happens if pools try to maximize fees by congesting the network?

the spend done to raise fees would need to be 15% of what the fees run.

Ie spend .2 btc on fees. your pool mine ⅓ the blocks so your actual spend is not .2 it is .133

So what does the cost of .133 raise the fees by for each block .  If they can move block fees from .1 to .5

and they hit ⅓ of those blocks they get .167 for spending .133

Perhaps, but with 5 big mining pools there should be some competition fee-wise:

https://miningpoolstats.stream/bitcoin

It's not like Foundry has 90% of the hashrate to solve almost every block...

If your hypothesis is correct, this gives some ammo to BTC critics to declare it "centralized".

Any way to raise fees that is not crazy expensive is being tested by large miners.

The ½ should bring about a lot of weird bizarre money moves.

But if I am foundry grabbing ⅓ of the blocks raising fees is in my interest.

I did, but don't assume that's his only wallet. Whales have multiple wallets, they mix funds... did you perform chain analysis or what?

Only a whale would waste that much money on a regular basis (as you said), not a shrimp.

At least those transactions are sending payments, not consolidating.
They're still doing it: this transaction takes 9 dust inputs and one large legacy input. It sends a small amount to a new address, and the majority back to the original large legacy address. If they would have forgotten about the dust, they could have made the same transaction, saved $300, and would have had more money in their large legacy address than they do now. If this is a failed algorithm I'd like to apply for a job to do this manually. I only charge 50% of all the money I save in fees. It will take me just a few months before I can retire.

You didn't check the link I posted, now did you? Usually, fiat billionaires don't get rich by wasting money. It's like spending $100 to get rid of $5 from your wallet. It doesn't make sense.

BTC whales don't give a shit, they're frivolous spenders.

Not much difference compared to fiat whales TBH...

Deja-vu? Seems like the output wallet is labeled as Bitfinex, no surprise if they are behind it, I remember them from a year ago when they did it exactly when I was seding a tx:


And guess what, they are still doing it:
https://mempool.space/tx/7470af51e25700b7053781fc72ed6cffb5b4996aea4d1dcb91072d3b29820717

81sat/vb when the last block had 11sat/vb transactions included.

They just don't care, Okex is also paying twice as much:
https://mempool.space/tx/ec529afad640fbfb757e833b57bf50683bf3c29dee0bacc0485894ffc57b6339
when you change the clients 10 times the fees you pay for withdrawals maybe that difference is peanuts.

Let's zoom in on two consolidations:

One dot: 13.0 sat/vbyte, paying $323.60
Two dots: 36.3 sat/vbyte, paying $997.36
According to mempool.space, they were both first seen at the same time, and both confirmed in the same block after 7 minutes. Someone could easily have saved $650.

This guy paid 444 sat/vbyte, but included many inputs with 3183 sats. Looking at his address, he's been doing that for a very long time. He's wasting massive amounts of money on transaction fees. I don't get it.

Meanwhile, the (Ordinal) blockchain spam still continues:

Once fees drop more, I expect many more consolidations.

I'm avoiding small transactions, and I'm probably not the only one. I don't like paying more than a dollar to buy a coffee. So if fees get low enough again, I expect the transaction volume to increase.