What is UTXO?
An unspent transaction output: a discrete chunk of bitcoin locked to a condition. Bitcoin has no account balances, only UTXOs.
Every transaction consumes existing UTXOs entirely and creates new ones. Spending part of a UTXO means creating a change output back to yourself, exactly like breaking a banknote.
A wallet "balance" is the sum of the UTXOs it can spend. This model explains why fees depend on the number of inputs, and why consolidating many small UTXOs when fees are low is a real optimisation.
Related terms
Transaction
A signed instruction consuming one or more UTXOs and creating new ones. Once confirmed it cannot be reversed.
How it worksChange output
The output that returns leftover value to the sender when a spent UTXO is larger than the amount being sent.
Transactions & feesDust
A UTXO so small that spending it would cost more in fees than it is worth.
Keys & custodyCoin control
A wallet feature that lets you choose which specific UTXOs a transaction spends.
This definition is part of the Bitcoin Logical glossary. For the fuller explanation, start with Learn, or see the live numbers on The Bitcoin Signal.