Library · Crypto, word by word · Transactions and fees
What is a UTXO?
A UTXO (unspent transaction output) is a piece of bitcoin received in an earlier transaction and not yet spent. A Bitcoin wallet balance is the sum of the UTXOs its keys can spend. Each UTXO must be spent whole: whatever is not paid out is sent back as change or left as the fee.
What it means for you
Sending bitcoin usually creates a change output back to your wallet, often at a new address, so seeing part of a balance move to an unfamiliar address is normal. Any value not assigned to an output goes to the miner as fee.
How it works
Bitcoin does not keep account balances. Each transaction consumes earlier outputs as inputs, each identified by the TXID that created it and an output index (vout), and creates new outputs for the recipients. Each output waits as a UTXO until a later input spends it, and because a UTXO can be spent only once, its full value must be spent or given to the miner. A change output sends the surplus back to the spender; whatever the outputs leave unassigned, the difference between inputs and outputs, is the miner's fee.
An example
Say your wallet holds one UTXO of 0.5 BTC and you pay 0.2 BTC. The transaction spends the whole 0.5: 0.2 to the recipient, 0.2999 back to you as change, and the 0.0001 not assigned is the fee. Leave out the change output and the miner receives 0.3 BTC.
Sources: Bitcoin developer guide: Transactions, Bitcoin: A Peer-to-Peer Electronic Cash System (Nakamoto) · checked 4 October 2026
Related words
Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.