UTXO's

The Bitcoin network utilizes the Unspent Transaction Output (UTXO) model to track your spendable funds. Instead of simply showing a balance, it monitors all unspent Bitcoin from previous transactions, indicating what you can spend from your wallet. Wallets without a 'Coin Control' feature typically display a total balance that represents the aggregate of all UTXOs you hold. Each UTXO can consist of various amounts of satoshis, each originating from distinct periods of creation. When UTXOs are used, they must be spent entirely; they cannot be divided or reduced. Example : U have 100$ in BTC in your wallet with only 1 UTXO. You buy an Ordinal for 40$. 100$ will be spend and 60$ will be back in your wallet. This transaction creates 2 outputs : 40$ send to the seller and 60$ are returned to your wallet. The seller will receive your money and he will have 1 UTXO more in his wallet. UTXO's are used as inputs for transactions and produce new UTXO's as outputs.