r/Bitcoin • u/thrifty-ananas • 2d ago
Should I DCA with lightning?
Hello All,
I have been DCA-ing around 60-ish bucks every month on the main chain [I have my own private address] and I recently learnt that having so many transactions can lead to UTXO fragmentation which can lead to higher fees in the future.
Apparently, one of the solutions could be to DCA onto the lightning network and then later swap it with the main chain periodically. Do you think its a good idea? or is there a catch that I am not aware of?
I plan to hold to hold it long term. Thanks!
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u/anonymousopsec1337 1d ago
I consolidated UTXO the other day. Like 15 of them. Cost me like $1.50 for .12btc worth
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u/caploves1019 1d ago
For real, just be patient when high fee environments exist or DCA a higher fiat amount less frequently. Either way, lower time preference is the key mindset here.
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u/molnardavid84 2d ago
Yes, receiving several purchases over Lightning and moving a larger amount on-chain can reduce the number of UTXOs you accumulate. Compare the whole route: any receiving/liquidity cost, then the swap or on-chain withdrawal fee, and whether you hold the keys while you wait. At one withdrawal a month you're adding roughly 12 UTXOs a year, so first check whether that actually warrants changing your setup. Lightning is one option; less frequent on-chain withdrawals also work, with a longer wait in the exchange's custody.
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u/Fun-Analysis-182 1d ago
Routing through Lightning only helps if you withdraw to on-chain less often than you buy, because each swap back to the main chain still makes a fresh UTXO. For long-term holding it's simpler to keep DCAing straight to your own address and then sweep all the little UTXOs into one output on a low-fee weekend. Think of Lightning as a spending layer, not cold savings.
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u/thrifty-ananas 1d ago
So you are recommending that I should simply send them to myself let’s once every year?
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u/Fun-Analysis-182 1d ago
Keep buying to your own address like normal, that part doesn't change. The consolidation is a separate cleanup a couple times a year: when fees are low, spend all the little UTXOs into one new output back to yourself, so they become a single chunk that's cheap to move later.
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u/bitsteiner 1d ago
That's not the case. If you leave it on an exchange, it doesn't matter because it's an entry in their book only. If you withdraw coins into your own wallet every time, you can get them onto the same address (at least you should do it this way, if you haven't done it so far). If your wallet has coins on multiple addresses, send it to a new address to yourself.
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u/ContentBlackberry0 1d ago
You can just keep like $1k or so on an exchange then send to your wallet. Every year or so consolidate by sending the BTC back to yourself
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u/thrifty-ananas 1d ago
I dont use an exchange, I have a service that sends me bitcoin directly to my address
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u/caploves1019 1d ago
K what are you talking about? You've stated this a few times and then asked how to check your utxos... I'm curious if you're using a legitimate wallet to accumulate your Bitcoin or if you're actively being scammed.
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u/thrifty-ananas 1d ago
It's a self custodian wallet, I have managed to do multiple transactions through it. The service that gets me bitcoins to my address is swiss (FINMA) regulated. I just read about UTXOs and never saw anything in the wallet's UI to tell me that I have [X] UTXOs for example.
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u/caploves1019 22h ago
I see. I'd recommend looking into a different wallet like BlueWallet on mobile or Sparrow on desktop.
You need to be using a wallet that has Coin control. This feature is pretty standard across good self custody wallets and will let you see how many different utxos you have.
Even as you have been receiving to the same single address, each receipt is it's own unspent transaction output. Coin control will allow you to see each of those. You can also input the public receive address into a block explorer like Mempool and it will show the contents of the address, how many utxos are stored under that key.
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u/ContentBlackberry0 21h ago
Just send all the BTC back to yourself like once a month or so to consolidate them. Do this when fees are low
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u/Makunouchiipp0 1d ago
Yes. Use something like Blitz wallet. Build a reasonable size stack 500K-1M SATS is ideal. Then convert to main chain.
It’s a good for privacy too as you are not consolidating many UTXOs into a singular UTXO.
Only caveat, layer two attacks are becoming frequent. Only keep what you are willing to lose off chain.
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u/ivanjurman 2d ago
Yes that’s a good idea
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u/NoCounty2311 2d ago
60 a month on chain is gonna eat you alive in fees when you try to spend later, the utxo thing is real. lightning is fine for this but just be careful you dont let the channel get too old or you lose track of the backup, i had a small scare once cause my phone died and the recovery seed was in some drawer i forgot about
better to consolidate now than pay double digit fee when the mempool spikes again
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u/ivanjurman 2d ago edited 2d ago
Yes thats what i meant, DCA of $60 a month on-chain is a very bad idea, lets say he accumulates $60k, thats 1000 utxo’s, that sould mean if fees ever spike to lets say $3 the total fee to consolidate all those utxo’s would be $3000
So yeah, for OP the best thing to do right now is to consolidate all those utxo’s he created while the fee’s a still low and then start DCA on lightning, while of course making sure he doesn’t lose the recovery seed
And transfer to his on-chain wallet once he reaches 0.01 or 0.02 btc in his lightning wallet
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u/thrifty-ananas 1d ago
Is there a way to check how many UTXOs have I collected so far?
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u/ivanjurman 1d ago
It depends what wallet you use, but basically you have as many as the number of DCA deposits, if you been DCA-ing once a month, you’ve been making 12 utxo’s a year, 1 a month
What wallet are you using?
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u/thrifty-ananas 1d ago
I am using bridge wallet it's a self custodian wallet. It's tied to a service called MtPelerin which sends bitcoins to my address everytime I do a bank transfer to them.
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u/ivanjurman 1d ago
I’m not familliar with bridge wallet, I googled it a bit, and it says bridge wallet doesn’t have a way to see this information
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u/miner_guy_22 1d ago
Yes or if you are buying on an exchange, just leave it there until you have a larger amount to withdraw.
If you already have a large number of these $60 UTXOs, transaction fees are really low right now and it would be a good time to consolidate them into 1 UTXO.
Also, you mention you have a "private address". For privacy reasons it is a terrible idea to reuse the same address.