Sign Up on MEXC
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
An unspent transaction output (UTXO) is reffered to the technical term used for the amount of cryptocurrency that remains after a transaction.
Unspent transaction output is like the change you receive after buying an item. It is not a lower denomination of the currency—it is a transaction output in the database generated by the network to allow for non-exact change transactions. The remaining portion of the whole cryptocurrency not spent in a transaction is used as an accounting measure. Just like double-entry accounting, each transaction has an input and output.
The unspent transaction output is a protocol for distributing the bits of data that cryptocurrency is made from. The many cryptocurrencies that use this model do not use accounts or balances. Instead, they use individual coins (UTXOs) that are transferred between users much like physical coins or cash. The model treats cryptocurrency as objects. The unspent transaction is stored only in the blocks when it is transferred, and to find the total balance of an account each block has to be scanned to find the latest UTXOs which point to that account.
The same model can be attributed to Hal Finney’s Reusable Proofs of Work proposal, which is based on Adam Back’s 1997 Hashcash proposal.
The UTXO model, which is used in many different cryptocurrencies, allows users to track ownership of all portions of that cryptocurrency. Because cryptocurrencies were created with anonymity in mind, UTXOs are associated with the public addresses visible to the entire network.
Share on
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
5M+ Monthly Page Views
50k+ Articles
