One of the best ways to create a consolidation transaction depends upon the tooling obtainable to you. In case your pockets has coin management, you’ll be able to manually assemble an enter set and resolve precisely which UTXOs to mix. On just about any pockets, you can consolidate your total funds by merely sending all the pockets stability to one among your individual addresses.
UTXO administration, particularly consolidation, is a low-urgency activity. Particularly if you’re doing it to scale back your total value, you wish to create consolidation transactions on the lowest attainable feerate. Whereas up to now years that often was the minimal transaction relay feerate of 1 ṩ/vB, presently, you would want to make use of a minimum of someplace between 5.15 ṩ/vB to six.5 ṩ/vB, for the reason that 5–6 ṩ/vB feerate band has not cleared in over a month. Up to now, it was attainable to regulate the mempool, and opportunistically consolidate each time the feerates had been particularly low. Up to now half of a yr, the blockspace market has considerably modified, and ~5 ṩ/vB seems to be like the present backside.
To reduce the price of spending your future UTXOs, you need to use essentially the most blockspace-efficient output sort that’s obtainable to you. Right now, this can probably be both P2WPKH or P2TR for single-sig wallets.
Relying on the frequency that you simply transact with the pockets, chances are you’ll wish to maintain a number of UTXO within the pockets to make sure ample liquidity. In case you solely have a single UTXO, everytime you make a cost, the rest of your funds will likely be returned to your self within the type of a change output. The change output will likely be unconfirmed as properly. Some wallets by no means spend unconfirmed UTXOs, and chances are you’ll be unable to make one other transaction till the primary confirms. Even when your pockets means that you can create a baby transaction, chances are you’ll be pressured to pay extra charges if you should make one other transaction with a better urgency, as you would want to additionally bump the father or mother transaction to the identical feerate.
You might also wish to maintain a number of UTXOs for privateness causes. In case you maintain your entirety of funds in a single UTXO, your subsequent recipient will be capable to guess that you simply a minimum of personal the quantity of your change output. In case you persistently “peal off funds” from a single UTXO, it could be trivial on your counterparties to proceed monitoring your pockets exercise by guessing which of the outputs was change.
Remember to house out your consolidations. In case you e.g. had been to consolidate after every cost you obtain, you’ll find yourself growing your total value as a substitute.
In case your pockets has a ample quantity of bitcoins to make it economically affordable, I might recommend that you simply maintain a minimum of 3–5 UTXOs of a spread of various quantities.