Butt joints are a nifty trick that lets you plank a row that is longer than the longest board you have available. Siding planks tend to come in twelve foot sections. On regular houses, a single wall could be much longer than twelve feet and butt joints are necessary. On tiny houses, butt joints are used for different reasons.
Due to windows, doors, and other features on the side of a tiny house, there are rarely sections where a twelve foot plank will not reach. Instead, butt joints are utilized to use off cut siding planks. For example:
The windward side is seven feet wide.
Three inches on each side is needed for trim space, so each plank needs to be six feet and six inches long.
If you cut a twelve foot plank at the six foot six inch mark, you now have a perfectly good plank that measures five foot six inches left over as an off cut. Instead of throwing these off cuts out, you can reuse them on the leeward side.
If you use a plank that is five foot six inches long, you need an additional piece that is one foot long. Connecting them with a butt joint will fill in the necessary length and give the tiny house the appearance you are looking for.