An unspent transaction output (UTXO) is a record of a cryptocurrency that has been sent but not yet spent. It represents a certain amount of cryptocurrency that has been authorized by a sender and is available to be spent by a recipient.
UTXOs are used in the UTXO model, which is one of the two main ways that cryptocurrencies track ownership of coins. The other model is the account-based model, which is used by cryptocurrencies like Ethereum.
In the UTXO model, each cryptocurrency is represented by a set of UTXOs. When a user sends cryptocurrency, they are spending one or more UTXOs. The recipient of the cryptocurrency receives a new UTXO that represents the amount of cryptocurrency they were sent. UTXOs can be combined and split up to make payments in any denomination.
The UTXO model has a number of advantages over the account-based model. It is more auditable, transparent, and efficient. It is also more resistant to fraud and double-spending. However, the UTXO model can be more complex to use than the account-based model.
Here are some of the key features of UTXOs:
- They are created when a cryptocurrency is mined or when a transaction is made.
- They can be spent by combining them with other UTXOs to create a new UTXO.
- They cannot be spent in part.
- They are associated with a public key, which allows anyone to verify that they are owned by a specific user.
- They are stored in a blockchain, which is a public ledger that records all cryptocurrency transactions.
UTXOs are a fundamental part of the Bitcoin and many other cryptocurrencies. They provide a secure and efficient way to track ownership of cryptocurrency.