Quote from: Dulen007 on July 29, 2025, 10:55:57 PM

Quote from: I_Anime on July 29, 2025, 07:10:40 PM

I know many here think that in their bitcoin wallet the balance showing are bitcoin. But nah is not bitcoin rather is UTXOs which stand for ( Unspent transaction Output ) . I am going to use this post to break it down for folk here (I know shey some of nah Dey aware already)on how it works , for those that don’t this is how it works .

Let me say Mr A received BTC from three separate transactions,

1st 0.5 BTC

2nd 0.3 BTC

3rd 0.2BTC

So those BTC above shows that Mr A has three UTXOs , totaling will be 1 BTC . So Aslong he never spend anything Mr A is still holding his UTXO until sending to another wallet as coin if am not mistaken.

So for instance Mr A want to do any transactions , like for instance 0.85 BTC . He go need to choose enough UTXO wey go fit cover that exact transaction of 0.85 BTC so e got use the three UTXO wey Dey he wallet as his new input inorder to coverup the 0.85 transactions . Then create 2 new outputs , one to the person his sending 0.85 BTC to while the other to himself as change of 0.15 BTC (the remaining digit wey go Dey show for the balance after the transaction).

Nice explanation OP, But I have a question sha...
If someone has many small UTXOs (tiny amounts), does it affect the transaction fee when sending BTC?
Like, will using many small inputs make the fee higher?
Just want to know if it’s better to combine them sometimes to save on fees later.

Bitcoin transaction fees are base on size in bytes, not the amount of BTC you are spending, so the reason why your fees tend to increase is that each input (UTXO you are spending) takes space . So the more inputs you use the larger your transaction becomes and the more space it will takes, and more bytes equal to more fees (because we are paying sat per byte ) , this is why most time before I make any transaction I will first observe the mempool to see the bytes it does fluctuate depending on network congestion.

So let me break it down with some example:

So for instance you want to spend 0.1 BTC ,

And you have one UTXO of 0.1 BTC = 1 input = small transaction fee (because it won’t take much space )

But when you have 10 UTXO of 0.01 each = 10 input = large transaction = higher fee ( though you are sending same amount of 0.1 BTC) but this time you are using much space due to the number of inputs.

So yeah using many small UTXO will definitely increase your fee and I hope you know how your UTXO usually increases.