๐ก What is UTXO?
Many folks think Bitcoin operates like a bank account, but in reality, Bitcoin uses the UTXO (Unspent Transaction Output) model.
Simply put, each UTXO is like a bill in your wallet.
For example:
You have 1 UTXO worth 1 BTC.
You want to send 0.3 BTC to someone else.
The system will spend that entire 1 BTC UTXO, send 0.3 BTC to the recipient, and create a new UTXO of 0.7 BTC back to you.
Bitcoin doesnโt track "account balance"; it tracks ownership of unspent UTXOs.
Thatโs why nodes only need to verify:
โ Does the UTXO exist?
โ Has it not been spent before?
โ Is the signature valid?
#Bitcoin #Crypto #UTXO #BlockchainEducation $BTC
Many folks think Bitcoin operates like a bank account, but in reality, Bitcoin uses the UTXO (Unspent Transaction Output) model.
Simply put, each UTXO is like a bill in your wallet.
For example:
You have 1 UTXO worth 1 BTC.
You want to send 0.3 BTC to someone else.
The system will spend that entire 1 BTC UTXO, send 0.3 BTC to the recipient, and create a new UTXO of 0.7 BTC back to you.
Bitcoin doesnโt track "account balance"; it tracks ownership of unspent UTXOs.
Thatโs why nodes only need to verify:
โ Does the UTXO exist?
โ Has it not been spent before?
โ Is the signature valid?
#Bitcoin #Crypto #UTXO #BlockchainEducation $BTC