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Coin Control: Choosing Your UTXOs

Coin control is the ability to select exactly which UTXOs you spend in a transaction. Without it, your wallet makes these decisions for you—often poorly.

Why Coin Control Matters​

Without Coin Control​

Your wallet automatically selects UTXOs using algorithms that optimize for fees, but ignore privacy:

You want to send 0.05 BTC

Wallet automatically picks:
- 0.03 BTC (from KYC exchange)
- 0.025 BTC (from non-KYC source)
─────────────────────────────────
Result: KYC and non-KYC coins are now linked!

With Coin Control​

You deliberately choose which UTXOs to spend:

You want to send 0.05 BTC

You select:
- 0.05 BTC (from KYC exchange only)
─────────────────────────────────
Result: Non-KYC coins remain separate!

Coin Control in Sparrow Wallet​

Sparrow has the best coin control interface available.

Viewing Your UTXOs​

  1. Open your wallet in Sparrow
  2. Click the UTXOs tab
  3. You'll see every UTXO with:
    • Amount
    • Address
    • Label
    • Date received
    • Transaction ID

Sending from Specific UTXOs​

Method 1: Send Selected

  1. Go to UTXOs tab
  2. Check the box next to the UTXO(s) you want to spend
  3. Click Send Selected at the bottom
  4. Enter destination and amount
  5. Complete the transaction

Method 2: From Send Tab

  1. Go to Send tab
  2. Enter destination and amount
  3. Before creating, check the transaction diagram
  4. Click on inputs to change UTXO selection

Labeling UTXOs​

  1. Go to UTXOs tab
  2. Double-click on any UTXO
  3. Enter a descriptive label:
    • Source (exchange name, friend, etc.)
    • KYC status
    • Date or purpose
  4. Labels persist across sessions

Freezing UTXOs​

To prevent a UTXO from being spent (e.g., suspicious dust):

  1. Go to UTXOs tab
  2. Right-click the UTXO
  3. Select Freeze UTXO
  4. The UTXO will be marked and excluded from all transactions

To unfreeze, right-click and select Unfreeze UTXO.

Coin Control in Electrum​

Electrum also supports coin control, though the interface is less intuitive.

Enabling Coin View​

  1. Go to View menu
  2. Check Show Coins
  3. A new Coins tab appears

Viewing UTXOs​

  1. Click the Coins tab
  2. See all UTXOs with amounts and addresses
  3. Right-click for options

Sending from Specific UTXOs​

  1. Go to Coins tab
  2. Right-click the UTXO you want to spend
  3. Select Spend From
  4. This opens the Send tab with only that UTXO selected
  5. Complete your transaction

Freezing in Electrum​

  1. Go to Coins tab
  2. Right-click the UTXO
  3. Select Freeze
  4. Frozen UTXOs won't be used in transactions

Best Practices for Coin Control​

1. Always Use Coin Control​

Make it a habit. Never let your wallet choose for you.

2. Group UTXOs by Source​

Organize your thinking:

  • Exchange A UTXOs — All KYC, linked to your identity
  • Exchange B UTXOs — Different KYC, different identity link
  • Non-KYC UTXOs — From P2P trades, mining, etc.
  • Mixed UTXOs — Post-CoinJoin

3. Spend Within Categories​

When making a payment:

  • If paying from KYC funds → use only KYC UTXOs from one source
  • If paying from non-KYC → use only non-KYC UTXOs
  • Never mix categories in one transaction

4. Minimize Inputs​

Select the fewest UTXOs needed:

  • Fewer inputs = lower fees
  • Fewer inputs = less history linked together

5. Consider Change Output​

After selecting UTXOs, think about change:

  • Where will change go?
  • Is the change amount creating dust?
  • Can you adjust the payment to minimize change?

UTXO Selection Strategies​

Strategy: Exact Match​

Find a UTXO close to your payment amount to minimize change:

Payment needed: 0.048 BTC

Available UTXOs:
- 0.1 BTC   ← Too big (lots of change)
- 0.05 BTC  ← Good match! (0.002 BTC change)
- 0.02 BTC  ← Too small (would need 3)

Best choice: 0.05 BTC UTXO

Strategy: Combine Same-Source​

When you must use multiple UTXOs, ensure they're from the same source:

Payment needed: 0.15 BTC

Available UTXOs:
- 0.1 BTC (Coinbase)
- 0.08 BTC (Coinbase)
- 0.05 BTC (Kraken)
- 0.03 BTC (Non-KYC)

Best choice: 0.1 + 0.08 from Coinbase
Avoid: mixing Coinbase with Kraken or Non-KYC

Strategy: Spend Oldest First​

For privacy, consider spending older UTXOs first:

  • They've been sitting longer
  • Less likely to be correlated with recent activity
  • Keeps wallet "fresh"

Common Coin Control Mistakes​

Mistake 1: Mixing Sources​

❌ Wrong: Selecting KYC + non-KYC in same transaction ✅ Right: Only select from one source category

Mistake 2: Over-Consolidating​

❌ Wrong: Combining all UTXOs when making a payment ✅ Right: Use minimum UTXOs needed for the amount

Mistake 3: Ignoring Labels​

❌ Wrong: Selecting UTXOs randomly without checking labels ✅ Right: Always verify the source before selecting

Mistake 4: Spending Dust Unknowingly​

❌ Wrong: Wallet auto-includes tiny UTXOs to "clean up" ✅ Right: Freeze suspicious small UTXOs, handle dust deliberately

Coin Control Checklist​

Before finalizing any transaction:

  • Am I using coin control (not auto-select)?
  • Are all selected UTXOs from the same source category?
  • Have I verified the labels on selected UTXOs?
  • Is this the minimum number of UTXOs needed?
  • Is the change output going somewhere appropriate?
  • Are there any suspicious UTXOs I should freeze?

Next: Learn about UTXO consolidation strategies to optimize your wallet during low-fee periods.