What is a UTXO?
Think of it like a dollar bill in your wallet. Some are bigger like $20, $50 while others are smaller $1, $5.
Bitcoin has the same thing, except digitally. To pay for a 0.1 BTC item, you pay with 1 BTC but get 0.9 BTC back as change. You now have a 0.9 BTC UTXO (Unspent Transaction Output). Your digital wallet sums up all the UTXOs in your wallet in order to show your balance, but in truth they are distinct.
The fee for making a transaction in bitcoin is based on the data usage and the more UTXOs involved, the more data used. So, right now people are spending their small UTXOs into a payment to themselves to combine their $1 bills into $100 bills.
Jestopher
npub18y…clpz3
2023-10-03 02:28:36
Author Public Key
npub18yvpnchj7yaepjk8yz2pn66hfmmup505aqvx0lpyc3aree0g5fyq8clpz3Published at
2023-10-03 02:28:36Event JSON
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"content": "What is a UTXO?\n\nThink of it like a dollar bill in your wallet. Some are bigger like $20, $50 while others are smaller $1, $5.\n\nBitcoin has the same thing, except digitally. To pay for a 0.1 BTC item, you pay with 1 BTC but get 0.9 BTC back as change. You now have a 0.9 BTC UTXO (Unspent Transaction Output). Your digital wallet sums up all the UTXOs in your wallet in order to show your balance, but in truth they are distinct.\n\nThe fee for making a transaction in bitcoin is based on the data usage and the more UTXOs involved, the more data used. So, right now people are spending their small UTXOs into a payment to themselves to combine their $1 bills into $100 bills.",
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}