UTXO Consolidation
wallet · fee
Combining many small unspent outputs into fewer larger ones to reduce future transaction size and fee overhead.
UTXO consolidation spends multiple small outputs back to the wallet as one or a few larger outputs. It can make future payments cheaper because those payments need fewer inputs.
Consolidation itself costs a fee and can harm privacy by linking addresses together. It is usually best done during low-fee periods with deliberate coin control and clear wallet labels.
Related terms
Unspent Transaction Output (UTXO)
→A discrete spendable output on a UTXO blockchain, similar to a digital coin that must be spent whole.
technical · blockchain
Coin Control
→Manual selection of specific UTXOs when creating a transaction.
wallet · privacy
Fee Rate
→Transaction fee per unit of size: commonly sat/vB for Bitcoin or sat/byte for Bitcoin Cash. It helps explain miner selection, not a guaranteed wait.
blockchain · economics
Privacy
→The ability to transact without revealing sensitive information about identity, balances, or counterparties.
security · principle