> For the complete documentation index, see [llms.txt](https://docs.leather.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.leather.io/learn/utxos.md).

# What are UTXOs?

UTXOs (unspent transaction outputs) are the separate amounts of bitcoin your wallet can spend. How they work and how to manage them.

A UTXO (unspent transaction output) is one amount of bitcoin that a previous transaction sent to an address and that nobody has spent yet. Your wallet balance is the sum of the UTXOs your keys can spend. Think of them as the separate notes and coins in a purse.

## How UTXOs work

* A transaction spends whole UTXOs as inputs and creates new UTXOs as outputs.
* A UTXO cannot be partly spent. If it is larger than the payment, the rest returns to you as a change output.
* Once spent, a UTXO is gone. Nodes reject any later transaction that tries to spend it again.

Example: you hold one UTXO of 0.2 BTC and send 0.15 BTC. The transaction spends the 0.2 BTC UTXO and creates two outputs: 0.15 BTC to your friend and the rest, minus the fee, back to you as change.

See [How Does Bitcoin's UTXO Model Work?](/learn/how-does-bitcoin-s-utxo-model-work.md).

## Managing UTXOs

Many small UTXOs, for example from regular small purchases, make later transactions larger and more expensive. Consolidating means sending them to yourself in one transaction when fees are low, which leaves one larger UTXO.

Spending UTXOs together also shows on chain that they belong to the same wallet.

## UTXOs in Leather

* Leather chooses the UTXOs for each Bitcoin transaction.
* Change returns to the same account. Leather uses one Native SegWit and one Taproot address per account.
* Leather leaves out UTXOs that would cost more to spend than they hold, and lists them as "Uneconomical" under "All balances" in Settings.

See [Why isn't all my Bitcoin balance available or spendable?](/balances/why-isnt-all-my-bitcoin-balance-available-spendable.md).