Agreed, it shows how early we still are. Interacting with the main chain won't be for the everyday user one day, and all this stuff will probably be abstracted away.
Once mass adoption is reached, society will not be using the base layer for everyday payments. On-chain transactions will still be used but instead for larger, more important store of value transactions mostly. Plus, on-chain transaction fees will be too large due to network usage and congestion, making most small transactions dust. Everyday payments will be made using a Layer 2 solution, such as Lightning.
@@Joe99 "abstracted away" that's a good way to put it. Unfortunately most people won't self custody their BTC and will use custodial solutions *hopefully not* run but mega corps.
Electromagnetism is a hard subject, but you not understanding it hasn't prevented you from having appliances at home, or using digital radio communication.
I don't understand the privacy part because technically speaking, sending ALL Bitcoin from all UTXO's/wallet addresses to a new single address does not necessarily mean it belongs to the same person. Isn't that exactly what someone would do if they gained access to your wallet to steal all the Bitcoin? They would just send it out to a new address. So the privacy argument doesn't make much sense. You can even claim that's exactly what happened - someone stole the Bitcoin to a new address you don't control. In either scenarios, no 3rd party would be able to deduce whether you control the new address or not, unless it's a custodial KYC wallet. What am I missing here?
Lets say you want to use the consolidated BTC to buy a house or convert it to fiat, the IRS could see that you just acquired some real state at the same time you sent your UTXOs. Now, I don't know the details on how the IRS could potentially prove you own that BTC.
I think you also reduce your privacy for another reason: if you go to spend a huge UTXO in the future, won’t the recipient get to also see the “change” that you get back, and better understand how much bitcoin you have?
I think so. But if you are using a cold wallet, and you protect your seed, I don't know if it would matter. I "think" it is more of a problem on exchanges where there is a KYC requirement (Know Your Client.)
Consolidate them when fees are low. If you want to spend from your balance later in a high fee environment, some of the "dust" UTXOs can become economically unspendable (fees are higher than the amount of BTC you're sending).
Does it makes a diffrence in case of vbytes needed for a tx to have multiple addresses with one utxo or one address with many utxo? Of couse not in the point of privacy.
If I have many small UTXO’s on an exchange and I then transfer a larger amount to cold storage does that 1 transaction then end up being 1 larger UTXO (of the transacted amount) on my cold storage?
@@ThePostmillennialthat depends on your own wealth and your planning, you want pieces of how much of your wealth on the blockchain, pieces of 10% , 20%, 30%, how much pieces do you want, the pieces for long term saving, and pieces for regular use. That totally depends on you, I always say plan your utxo ahead
If you’re not doing anything wrong with your bitcoins, then you shouln’t mind the potential "reduction" in privacy? What could the adversary do with that information?
It depends. Maybe not, or maybe so. Even if you haven’t done anything WRONG, would you feel comfortable with anyone looking up a list of every place you’ve ever bought anything, every place you’ve ever received money from, or everything you’ve ever bought?
