An unspent transaction output (UTXO)Unspent transaction output (UTXO) is a data structure for the amount of cryptocurrency a user can spend and is used... Read More refers to a transactionA transaction is a record of an event that occurred in the past. Transactions typically occur during the course of... Read More output that can be used as an input in a new transaction. In essence, UTXOs define where each blockchain transactionA blockchain transaction is a digital recording of an event or action stored in a public, decentralized ledger. A blockchain... Read More starts and finishes. The UTXO model is a fundamental element of BitcoinBitcoin is a cryptocurrency. It is a decentralized digital currency that is based on cryptography. As such, it can operate without the... Read More and many other cryptocurrenciesA digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by....
In other words, cryptocurrency transactions are made of inputs and outputs. Anytime a transaction is made, a user takes one or more UTXOs to serve as the input(s). Next, the user provides their digital signatureA digital signature is a cryptographic mechanism designed to provide proof of authority and authenticity in electronic form. In blockchain... Read More to confirm ownershipEvery transaction and block on a blockchain has an owner. An owner is any entity (person, group, or organization) with... Read More over the inputs, which finally result in outputs. The UTXOs consumed are now considered “spent,” and can no longer be used. Meanwhile, the outputs from the transaction become new UTXOs – which can be spent in a new transaction later.
