UTXO
UTXO is an unspent transaction output. A wallet balance is the sum of such outputs rather than a number sitting in an account.
What UTXO is
The familiar picture goes like this: an address has a balance, and money gets taken out of it and put into it. Bitcoin does not work that way. Every transfer creates outputs, and each output is either still unspent or spent in full. Your balance is simply the sum of the unspent outputs you can dispose of.
An output cannot be spent in part. If you need to send less than the output holds, the wallet takes the whole thing, gives the recipient the amount required and returns the remainder to itself as a new output. That is why transfers to yourself show up in the wallet history, and it is no mistake.
For a miner this matters because of fees. Transaction size grows with the number of inputs, and the fee is paid for size. The pool pays you many times over, each payout is a separate output, and a year later you can be sitting on a hundred small outputs instead of a few large ones.
Small outputs sometimes cost more than they are worth: on days of a long queue the fee for spending them runs past the amount itself. Such outputs are called dust, and they just sit there.
Quick reference table
| What it is | an unspent transaction output |
| Wallet balance | the sum of unspent outputs |
| Partial spending | impossible, the remainder comes back as a new output |
| Why a miner cares | many payouts mean many small outputs |
| Dust | an output that costs more to spend than it holds |
What to do about it
Raise the minimum payout at the pool. Rarer and larger beats often and in pieces: there will be fewer outputs, and spending them will cost less.
Merge small outputs into one on quiet days, when the queue is short. That operation is called consolidation, and doing it on a busy day makes no sense.
Do not run payouts through an extra wallet for the sake of convenience. Every extra transfer is one more fee and one more set of outputs.
An example of the logic
The pool pays small amounts every day. Half a year on you decide to move it all at once, and the wallet builds a transaction out of one hundred and eighty inputs. It comes out large, which means expensive. The same result with a minimum payout five times higher would have come together out of three dozen inputs.
Related terms
Where to go next on the site
Coins
Hardware
- ASIC Miner knowledge base
Questions and answers
Why is there a transfer to myself in the wallet history
That is the change. An output gets spent whole, so the excess comes back to you as a new output.
What is dust
An output so small that the fee for spending it is comparable to the amount or larger. While fees stay high it just sits there.
How do I cut down the number of outputs
Raise the minimum payout at the pool and merge small outputs into one from time to time, when the queue on the network is short.
How the terms connect
Every link in the chain is clickable. Orange marks where you are now.
Looking for an ASIC miner
The catalog holds 212 models. You can compare them by hashrate and by joules per terahash, then plug your own rate into the calculator and see what stays in your pocket.
Page written and checked by Denys Klimchuk. Updated .