UTXO

Unspent Transaction Output — the basic unit of Bitcoin balance. Your wallet is a collection of UTXOs.

A UTXO — Unspent Transaction Output — is the basic unit of Bitcoin balance. Every Bitcoin transaction creates one or more outputs (chunks of value sent to specific addresses); when those outputs haven't yet been spent in a later transaction, they're UTXOs.

Your "wallet balance" is the sum of all UTXOs your wallet controls. When you send Bitcoin, the wallet selects enough UTXOs to cover the amount, uses them as inputs, and creates new outputs (one to the recipient, and usually one back to you as change).

UTXOs matter for two reasons. Privacy: which UTXOs you spend together can leak information about your overall stack. Fees: more UTXOs in a transaction means a bigger transaction and a higher fee. Wallets that handle UTXO selection well save you money and protect your privacy.

Learn this in our courses

Course topic

Privacy & freedom

Why financial privacy matters and how to keep yours when the world is going the other way.

Course topic

Wallets & self-custody

How to store Bitcoin so that nobody — not even us — can take it.

Related terms

Glossary

Address

A unique string used to receive Bitcoin. Public, but tied to no name unless you reveal one.

Glossary

On-chain

A Bitcoin transaction settled directly on the main blockchain. Slower and more expensive than Lightning but the ultimate settlement layer.

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