Automatic selection is a trade-off
Most wallets automatically choose UTXOs using an algorithm that balances fee cost, change creation and efficiency. This is convenient and often appropriate.
Coin control exposes individual UTXOs so the user can override selection. Careless manual selection can increase fees or weaken privacy.
Labels preserve context
A local UTXO label can record where funds came from, their purpose or whether combining them would reveal information. Labels should not be published on-chain.
Before spending, review selected inputs, labels, recipient, fee and change destination. Avoid combining unrelated sources without understanding the privacy consequence.
Consolidation has timing costs
Combining small UTXOs when fee rates are low can reduce the size of a future payment, but consolidation publicly links those outputs.
The right choice depends on future use, current fees and privacy goals. Coin control is a decision tool, not a universal instruction to consolidate.
Visual recap
A deliberate coin-control decision
Review labelled UTXOs and check cost, links and change before signing.
Review labels
Select UTXOs
Check links
Preview fee
Inspect change
Sign
Key takeaways
- Coin control means choosing specific UTXOs as inputs.
- Labels preserve off-chain context for future decisions.
- Consolidation may reduce future fees but creates public links.
- Always preview inputs, outputs, fee and change before signing.
Lesson recap
Check what you learned
Reveal each model answer, then honestly mark whether you understood it or need another review.
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Recall
What is the privacy cost of consolidating unrelated UTXOs?
References
