In a UTXO chain, coins exist as individual outputs from earlier transactions. Spending means consuming whole outputs and creating new ones, including change back to yourself, much like paying cash and receiving coins back.
The model helps privacy and parallel verification, but it makes fees depend on how fragmented your wallet is, because every input you consume adds bytes to the transaction.
Example: a wallet holding 0.5 BTC as one output pays a small fee to send it. The same 0.5 BTC held as 200 tiny outputs from mining payouts may cost ten times more to spend, and in a high-fee period those dust outputs can cost more to move than they are worth.
Related: account-model, gas-fee, block, txid