What is Nostr?
wakoinc / Blake
npub1ktw…mrvj
2023-05-26 17:46:20
in reply to nevent1q…te8w

wakoinc on Nostr: When you spend Bitcoin, you typically have a change output (UTXO). This is because ...

When you spend Bitcoin, you typically have a change output (UTXO). This is because your current UTXOs likely don’t have the exact amount you’re trying to pay.

When you try to spend BTC, you use one or more of your UTXOs and create a payment output and a change output for yourself (based on what you overpaid).

By consolidating UTXOs, you (kind of) turn change/coins into notes, meaning less future UTXO inputs and cheaper Bitcoin transactions (as you pay per data size, and more UTXO is more data).

Other reasons include privacy motives or managing KYC/Non-KYC linked coins. Or migrating to new address types like taproot.

UTXO being an unspent transaction output.
Author Public Key
npub1ktw5qzt7f5ztrft0kwm9lsw34tef9xknplvy936ddzuepp6yf9dsjrmrvj