The mooring guide
How unspent outputs work, in the order you need them
Each section builds on the one before it. Read straight through if you can, and come back to a single section when you need it again.
One output, one spend
Every output is created by a transaction, and it can be used as an input to another transaction exactly once. Once it has been used, it is spent, and no later transaction can use it again. The network enforces this by checking each new transaction against the record that every node keeps for itself.
An output that has been created and not yet used is an unspent transaction output. That phrase is where the acronym comes from. Being unspent is the state that counts, because it is what a wallet can still bring to a payment.
Inputs and outputs
A transaction lists inputs and outputs. An input points to one specific earlier output and includes the proof that its lock can be opened, usually a signature made with the matching private key. An output names an amount and a new lock, which is how value is assigned to someone.
Outputs are whole. You cannot reach into an output and take part of it. If a payment needs less than an output holds, the remainder has to go somewhere, and that is where change comes in.
Change
Suppose one output holds 30 units and you want to pay 25. The transaction must consume the whole 30-unit output. To avoid giving the difference away, the wallet creates a second output, the change, and sends the 5 remaining units to an address you control. Change is a new output: a fresh mooring for a fresh boat.
This is why a wallet balance can look lumpy. It is the sum of several separate outputs, and every payment reshapes that set.
Fees are the gap
A transaction does not state its fee. The fee is whatever is left over: the total of its inputs minus the total of its outputs. The party that includes the transaction in a block can keep that remainder, so senders compete by deciding how much they are willing to leave behind.
That is why a fee never appears as a line item. If the outputs add up to less than the inputs, the difference is the fee.
Coin selection
For each payment, a wallet chooses which outputs to spend. Its goals pull against one another. It wants to spend few outputs, to keep the transaction small. It wants to avoid change so small that spending it later costs more than it is worth. And it wants to avoid leaving behind a clutter of tiny outputs that are awkward to use.
The payment dial on this site uses the simplest rule, largest first, because it makes the shape of the problem visible. Real wallets use more careful strategies, weighing fee rates, privacy and the size of the transaction they would produce.
Consolidation and dust
Consolidation means combining many small outputs into one. It can make later payments simpler, but it costs fees now, and it reveals that the combined outputs belonged together. Consolidating is a trade, not a virtue in itself.
Dust is the name for an output so small that spending it costs more than the output holds under the fee conditions of the moment. Dust is a property of the fee environment rather than a fixed size. When fees change, the same output can move from useful to uneconomic, and back again.
Privacy notes
Change is commonly sent to a new address. Reusing addresses links payments that would otherwise be separate on the public record. Patterns in how outputs are combined and spent can also hint at which outputs share an owner, so careful wallets avoid habits that give too much away.
Privacy here is a set of habits and tools, not a switch. Read how your wallet handles change and address reuse before you rely on it for anything that matters to you.
A worked example
Take the six outputs used on the payment dial: 30, 25, 19, 12, 8 and 6 units. You want to pay 50 units. Largest first, the 30-unit and 25-unit outputs together cover 55 units. Both are spent, and the 5 units left over return as change. The 19, 12, 8 and 6 are untouched. They remain unspent and ready for some later payment.
A real transaction would also leave a fee, the difference between its inputs and its outputs. In that case the change would be smaller by the amount of the fee. The units here are illustrative and stand in for any amount.
Where this guide stops
Not financial, legal, or medical advice. This guide explains how a protocol works. It contains no price view, no forecast, and no recommendation about any holding or transaction. Examples use illustrative units, not currency.
For the working vocabulary, read the glossary. To see the same rule run live, open the payment dial.