What is a UTXO?

Bitcoin doesn't use accounts or balances like a traditional bank. Instead, it uses Unspent Transaction Outputs (UTXOs). Think of your wallet as a piggy bank holding various digital bills and coins. If you receive 1 BTC, 0.5 BTC, and 0.1 BTC in three separate transactions, your wallet balance is 1.6 BTC, but underneath it is constructed of those three distinct UTXO "bills".

The Cost of Spending

When you send Bitcoin, your wallet must digitally sign and unlock these UTXOs. Every UTXO you consume adds data (bytes) to the overall size of your transaction. Because block space is limited, miners charge fees based on the byte size of the transaction, not the monetary value being sent.

Spending a hundred tiny 0.001 BTC inputs to spend 0.1 BTC requires a massive amount of data, resulting in a significantly higher miner fee than spending a single 0.1 BTC input.

The Dust Problem

If network fee rates rise (e.g., 300 sat/vByte), the cost to unlock a small UTXO might actually exceed the value of the UTXO itself. This renders the UTXO economically "Unspendable" or trapped as Dust.

How This Tool Helps

The UTXO Modeller allows treasury operators to:

• Visualise: Instantly see the composition of an address and identify which UTXOs are currently trapped by network fees.
• Simulate: Test different Coin Selection algorithms (Oldest First, Largest First, Branch & Bound) to see exactly how your wallet builds transactions under the hood.
• Optimise: Predict exact fee impacts, prevent dust creation during change generation, and time large consolidations when network conditions are favourable.