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I have 5 hosted ASIC miners mining bitcoin. For about 2 years, these miners have generated about .001 bitcoin a day and everyday I have that amount sent to my ledger hardware wallet. So there are hundreds of very small transactions.

I recently learned that the ledger is not well suited as a mining wallet (for other reasons). So I tried to consolidate these coins in another wallet and the estimated transaction fee was $2,000 at 265/sat per byte or $4,438 at 376/sat per byte!!!!!!!

I'm assuming this is because of the amount of space required for so many small the transactions. Am I screwed into having to eat this cost? Any suggestions?

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2 Answers 2

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There's no feerate that you must use other than greater than the minimum of 1 sat/vbyte. You can choose to pay a lower feerate if you are willing to wait a bit.

However, the feerates that you show are pretty high, even for current mempool conditions. https://mempool.space/ estimates a current high priority feerate of 110 sat/vbyte, so 376 is probably way too much anyways.

If you are concerned about fees, I would suggest that you first enable RBF and then pick a much lower feerate. If the transaction is taking longer to confirm than you want, then you can increase the fee after the fact.

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To add to the other answer: the size (and, thus, the cost) of your transaction depends on the number of inputs. Even though you might have sent the mining rewards to the same address, those transactions produce one UTXO (unspent transaction output) each.

In order to spend the funds, you'd need to use those UTXOs as inputs for your new transaction, and provide some kind of secret (your permission to spend) individually for each UTXO. Because of this, the size of the spending transaction grows with the number of UTXOs, and the more UTXOs you spend, the more the resulting transaction costs.

Some companies (and individuals) in the Bitcoin space often aggregate large numbers of UTXOs into a combined UTXO whenever the fee rate is low, and I suggest you do the same (if you're not in a hurry), possibly combined with the RBF idea suggested in the other answer.

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