Definition
A UTXO (Unspent Transaction Output) is a discrete amount of bitcoin that has been received and not yet spent. Bitcoin does not track account balances the way a bank does; instead, it tracks individual outputs. Your "balance" is simply the sum of all UTXOs your wallet controls. Each UTXO is like a physical coin or bill of a fixed denomination — to spend it you consume the whole thing, sending part to a recipient and any remainder back to yourself as a new "change" output.
How the model works
Every transaction destroys one or more existing UTXOs (its inputs) and creates one or more new UTXOs (its outputs). The outputs of one transaction become the spendable inputs of a future one, forming an unbroken chain. To spend a UTXO you must satisfy its locking script — typically by providing a signature from the correct private key. Full nodes maintain the complete UTXO set, which is what they consult to confirm a coin exists and has not already been spent, preventing double-spends.
Why UTXOs matter for privacy and fees
UTXO management has practical consequences. Spending many small UTXOs makes a transaction larger and more expensive, since fees are charged per byte of data. "Coin control" lets advanced users choose which UTXOs to spend, improving privacy and fee efficiency. Consolidating UTXOs during low-fee periods is a common sovereignty practice.
The very first UTXO in every block comes from the coinbase transaction. See also our full node entry, which tracks the UTXO set.
In Simple Terms
A UTXO (Unspent Transaction Output) is a discrete amount of bitcoin that has been received and not yet spent. Bitcoin does not track account balances…