# UTXOs

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Only **Operators** can manage UTXOs on Ledger Enterprise.
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## What are Unspent Transaction Outputs (UTXOs) ?

In Bitcoin and similar blockchains, every transaction consists of **inputs** and **outputs**:

* An **output** is the amount of Bitcoin sent to a recipient.
* An **input** is a portion of Bitcoin from your wallet used to fund the transaction — any leftover amount (the "change") is returned to your wallet as a new output, which can be used in future transactions.

**Example:** If you want to send $8 but only have a $10 bill, you pay with the $10 and receive $2 back as change. Bitcoin transactions work the same way.

**UTXOs (Unspent Transaction Outputs)** are the individual pieces of Bitcoin that remain unspent in your wallet — essentially, they are your "available change." When added together, they represent your total wallet balance.<br>

## UTXO selection strategy for transactions

When creating a Bitcoin transaction, you can choose from different strategies to determine which UTXOs (Unspent Transaction Outputs) to use:

1. **Optimize for Size (Default Strategy):**\
   Selects the largest available UTXOs first. This reduces the number of inputs in the transaction, helping to minimize transaction size and, therefore, fees.
2. **Merge Small Outputs:**\
   Prioritizes using smaller UTXOs. This strategy helps consolidate many small pieces of Bitcoin into fewer, larger ones, which can reduce wallet fragmentation over time.
3. **Prioritize Deep Outputs:**\
   Selects UTXOs that have been confirmed the longest (i.e., have the most confirmations). This can improve transaction reliability and security by using more established funds.

<figure><img src="https://3559080615-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FapjLO0A6xJKWicwzV6aG%2Fuploads%2FBbHXPOeYRlOVWEUrQs38%2Fimage.png?alt=media&#x26;token=dfe04114-0840-40ed-9ccc-89dee775c0a4" alt=""><figcaption></figcaption></figure>

## UTXO consolidation <a href="#utxo-consolidation" id="utxo-consolidation"></a>

### Why Consolidate UTXOs?

UTXO consolidation is the process of reducing the number of small-value unspent outputs in your wallet by sending them to yourself in a single transaction.

By combining multiple small UTXOs into one larger UTXO — similar to exchanging many coins for a single bill — you make your wallet more efficient. This makes it easier to send larger payments in the future and can help lower transaction fees, especially if you consolidate when network fees are low.

**Example:**\
If you consolidate 100 UTXOs, each worth 0.01 BTC, you'll end up with one UTXO worth 1 BTC.

### Before you start

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**Only Operators** who have the Creator role in the Account can consolidate UTXOs.
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**Best practices**

* Consolidate UTXOs only when the account has no pending or incoming transactions.
* Approve UTXO consolidation requests immediately after creation.
* Create and approve one UTXO consolidation request at a time — avoid creating multiple requests simultaneously.
  {% endhint %}

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The consolidation is always performed on the index 0 address of the account, that is the first-ever generated address in your account.

**If the selected account uses whitelists only**, ensure that address index 0 is either included in an existing whitelist or covered by a dedicated rule. Contact an Administrator to configure this, as it is required to perform UTXO consolidation in the account.
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You can consolidate **up to 100 UTXOs at a time** by creating a transaction to yourself. The smallest UTXOs are selected, but those below 546 satoshis are ignored. If the account holds more than 100 UTXOs, repeat the process as needed.
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### Consolidation request

1. Click **Accounts** on the left panel.
2. Click the name of the account for which you want to consolidate UTXOs.
3. Click the **UTXOs** tab at the top of the page.
4. Click **Consolidate** in the top right.

<figure><img src="https://3559080615-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FapjLO0A6xJKWicwzV6aG%2Fuploads%2F33WpRHFEQ0lbQ1pArRQ7%2FScreenshot%202025-03-31%20at%2014.28.46.png?alt=media&#x26;token=d9008b4c-af54-4b31-b114-52016af8cf99" alt=""><figcaption></figcaption></figure>

5. Click **Verify on device** in the modal.
6. On your device, verify the information and tap **Confirm** .
7. In the transaction dialog, the number of **Consolidated UTXOs** and the corresponding total **Amount** are displayed. \
   \&#xNAN;*Note: In rare cases, if the transaction fees are higher than the consolidated amount, you'll need to enter a lower number of UTXOs to allow the transaction to be created.*
8. (optional) Click **Add comments** and enter a **Label** and **Comments** .
9. Click **Create transaction**.
10. On your personal security device, verify the information and tap **Confirm** .

### Approval

Depending on the approval workflow defined for the account, the request might need to be approved by other Operators.

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The request must be processed before the 7-day expiry date. If the request expires a new one must be created.
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