This article explains what the Coin Control feature is and the main reasons you might want to use it. While the BitBoxApp normally handles transactions for you automatically, Coin Control gives you precise power over your on-chain activity.

What is a UTXO?

To understand Coin Control, you first need to understand how a Bitcoin wallet works. Your Bitcoin balance is not a single number, but a collection of different "pieces" of bitcoin. These pieces are called Unspent Transaction Outputs, or UTXOs.

You can think of UTXOs like individual banknotes and coins in a physical wallet. If you need to pay for something that costs $12, you might use a $10 bill and two $1 bills. Your Bitcoin wallet does the same thing, combining different UTXOs to make a payment. For a deeper dive, you can learn more about what a UTXO is and how it works.

How does Coin Control work?

Normally, the BitBoxApp automatically selects which UTXOs (banknotes) to use to create your transaction, prioritizing efficiency and low fees.

Coin Control is an advanced feature that lets you override this automatic selection. It displays a list of all the UTXOs in your account, and you get to manually choose exactly which ones you want to spend.

Why should I use Coin Control?

Manually selecting your UTXOs provides several powerful benefits for managing your Bitcoin.

Enhance your privacy

This is one of the most important benefits of Coin Control. By choosing which UTXOs to spend, you can avoid creating links between different parts of your financial history on the public blockchain.

For example, you can keep UTXOs you received from a KYC (Know Your Customer) exchange separate from UTXOs you received from a private transaction. This makes it much harder for chain analysis firms to trace your activity and build a profile about you.

Prove ownership of funds

Sometimes, an exchange or service may ask you to prove that you own a specific Bitcoin address. This often involves sending a very small, specific amount of bitcoin (sometimes called a "Satoshi Test"). With Coin Control, you can select the exact UTXO associated with that address to send from, which serves as proof of ownership.

Consolidate “dust”

"Dust" refers to tiny UTXOs that are so small their value is less than the fee required to spend them. You can use Coin Control to combine several of these small UTXOs into a single, more useful one during a time of low network fees. This process, also known as UTXO consolidation, helps to clean up your wallet and can reduce transaction fees in the future.

Frequently Asked Questions

Is Coin Control for beginners?

While Coin Control is a powerful tool, we designed it to be as clear and accessible as possible in the BitBoxApp. It's a great feature to learn as you become more experienced with Bitcoin. The key is to be mindful of which UTXOs you are combining to avoid linking different parts of your financial history, like keeping funds from a KYC exchange separate from private funds. With a basic understanding of UTXOs, you can use this feature confidently to improve your privacy.

Where can I find the Coin Control feature?

The feature must first be enabled in the BitBoxApp. For a full walkthrough, please see our guide on how to activate and use it.