What is a UTXO?
Bitcoin uses a transaction model that is fundamentally different from traditional banking systems. Instead of holding balances in accounts, Bitcoin tracks the movement of discrete "chunks" of value as they transfer between addresses.
Bitcoin transactions contain inputs (value sent) and outputs (value received). A UTXO is a transaction output that has never become an input in a following transaction. In other words, UTXOs are essentially independent chunks of value that haven't been spent yet (Unspent Transaction Outputs).
utxo Creation:
When someone sends you bitcoin, what they are really doing is creating a transaction where outputs (UTXOs) are assigned to an address that you control the private keys to. These UTXOs cannot be moved (either transferred or spent) without your private keys being used to sign a transaction that features them as inputs.
moving utxo's:
To move bitcoin, (this includes transferring bitcoin to another address you control, or spending it to an address someone else controls in exchange for goods or services) , you create a new transaction. This transaction will use your UTXOs as inputs.
Say you have a UTXO worth 1 BTC and you want to send 0.3 BTC to someone. Your transaction will use the 1 BTC UTXO as an input and create two new UTXOs as output: one for 0.3 BTC to the recipient's address, and one for 0.7 BTC as change, which goes back to an address you control. Many modern wallets automate this process and will automatically select a "change address" for you that is derived from your private key and thus under your control.