Imagine this: You’re stacking sats every week. Via standing order, straight into your own wallet. It just works. Feels good. 🐷

But have you ever looked at what’s actually happening inside your wallet? Because there’s a problem that many stackers only notice when they want to move their Bitcoin at some point. And then it can get expensive.

What are UTXOs?

Every time you receive Bitcoin, a new UTXO is created in your wallet – an “Unspent Transaction Output”.

If you buy Bitcoin every week, after one year you end up with 52 individual UTXOs.

The problem: When you want to send your Bitcoin at some point, often (depending on the amount) multiple UTXOs need to be used. Remember: The more UTXOs in a transaction, the larger the transaction, the higher the fees.

We’ve already written a detailed post about this 👉🏻 Save Money with UTXO Management

What does this mean in practice?

Let’s do the maths. You buy Bitcoin for €100 every week for a year. That’s €5,200 invested and 52 UTXOs in your wallet.

Now you want to move your Bitcoin. All 52 UTXOs need to be consolidated.

At 200 sat/vB: 👉🏻 Consolidation costs around €1,500 – that’s ~30% of your stack.

At 300 sat/vB: 👉🏻 Around €2,300 – nearly half of your stack gone to fees. 😱

And these are not made-up numbers. As a reminder: In April 2024, the median fee briefly exceeded 1,800 sat/vB.

A single transaction with one UTXO at high priority cost around €170 back then. Imagine what 52 small UTXOs would cost in that kind of environment.

⚠️ The big danger: Many of these small UTXOs then become Dust – Bitcoin amounts so tiny that the fee to send them costs more than the UTXO itself is worth.

What can you do about it?

The classic solution: Consolidate your UTXOs regularly when fees are low. This works very well, but it requires “active maintenance” and has to be done manually every time – basically the opposite of what you want from a “set and forget” savings plan. Alternatively, you can adjust the frequency of your savings plan, e.g. buying €800 every 2 months instead of €100 per week.

But there’s now a much smarter solution. 💡

The Blockstream App: Three Bitcoin Layers, One App

Blockstream is one of the most experienced Bitcoin companies out there and has been building Bitcoin infrastructure since 2014. Blockstream is the creator of the Liquid Network and the Jade hardware wallet.

If you’re not yet familiar with Lightning and Liquid – here’s what you need to know:

⛓️ On-Chain Bitcoin is the base layer of Bitcoin. Maximum security and full decentralisation. But also the highest fees.

⚡️ Lightning is a second layer built for fast, cheap payments.

💧 Liquid is a Bitcoin sidechain by Blockstream with faster blocks and very low fees.

Blockstream just launched a major update for their app that aims to solve the UTXO problem: Cross-Chain Swaps between On-Chain, Lightning Network and Liquid. All in a single, self-custodial app.

Instead of creating a new small on-chain UTXO every week, you can receive your sats on Lightning or Liquid – and only go on-chain when the amount is large enough and fees are favourable.

👉🏻 Instead of 52 small UTXO fragments, you end up with a single UTXO, which can save you up to €1,000 to €2,000.

Worth highlighting:

• The app enables swaps between On-Chain, Lightning and Liquid – move your sats flexibly back and forth, all in one app.
• Hardware security with Jade – even Lightning payments can now be made via the hardware wallet.
• Self-custody from start to finish – the swaps work via Atomic Swaps. Your keys stay with you at all times.

Will this work with Bittr too?

We’ve already looked into stacking on Liquid. It would be a huge benefit for our users. A small obstacle currently exists with Message Signing. Before Bittr can send you Bitcoin, you need to prove that the receiving address really belongs to you. We solve this through Message Signing of an on-chain Bitcoin address.

Liquid wallets don’t support message signing yet: it only exists in Elements Core, so you’d need to run a full Liquid node to sign a message.

The goal is clear: In the future, stack directly via Bittr onto Liquid and only move to on-chain when a certain amount has been reached 💪🏻

What you can do now

👉🏻 If you want to try out the swaps, download the Blockstream App. 👉🏻 Try a swap – e.g. a Lightning → Liquid swap, to get a feel for it.

The Cross-Chain Swap feature (including On-Chain Swaps) is available from March 12, 2026.

This article was created in collaboration with Blockstream. As a little extra, you get 10% off at the Blockstream Shop! 🎉 Use the code “BITTR” in the Blockstream Store.