Unspent Transaction Output (UTXO)

Definition

An unspent transaction output is a previously created transaction output that remains available to be spent under its locking conditions. Bitcoin tracks spendable value through UTXOs rather than maintaining a conventional account balance for each address. Each output specifies an amount and spending requirements, while a later transaction consumes the complete output as an input and creates new outputs. A wallet's displayed balance generally summarizes the outputs it can identify and potentially spend, subject to confirmation, maturity, or other constraints. Selecting several small UTXOs can require more transaction data than selecting one larger output, affecting fees. Spending patterns can also reveal relationships between addresses. An output's presence in the UTXO set does not tell an observer who holds the necessary keys, and a wallet can watch an output without being able to spend it. UTXO management therefore connects accounting, transaction construction, cost, and privacy.