What is Unspent Transaction Output (UTXO)?
Crypto Glossary Definition
UTXOs are a fundamental concept behind the way cryptocurrency is transferred on many blockchains, including Bitcoin. The total UTXOs tied to a given wallet address represents the amount of funds available in that wallet. Every transaction consumes elements from this set and creates new ones. When funds are sent to a wallet address, the remaining balance in that wallet is sent back to itself as an UTXO.
Why Unspent Transaction Output (UTXO) Matters
Bitcoin doesn't track "account balances" the way a bank does — instead, your balance is the sum of all UTXOs (unspent outputs from previous transactions) associated with your addresses, a fundamentally different accounting model from Ethereum's account-based system.
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