UTXObased

UTXObased refers to a class of blockchain ledger designs in which all value transfers are performed by consuming and creating unspent transaction outputs (UTXOs). Each UTXO represents a discrete, spendable amount of cryptocurrency locked to a script or address. A transaction gathers one or more existing UTXOs as inputs and produces new UTXOs as outputs. The sum of input values must cover the sum of the outputs plus transaction fees. After confirmation, the spent inputs no longer exist as spendable outputs, and the new outputs become available for future transactions. The receiver gains control of a UTXO by providing the correct unlocking data for the output’s locking script, such as a private key signature.

In a UTXObased system, there is no single global balance per account; instead, each user holds a collection of UTXOs associated with their addresses. This model supports parallel validation, as different transactions can be verified independently as long as they reference valid UTXOs. It can improve privacy, since overlapping outputs can be combined in different ways, though it can also complicate wallet coin selection and balance estimation.

Bitcoin and Litecoin are primary examples of UTXObased networks, while Cardano and some research proposals have extended the UTXO concept (for example, Cardano’s eUTXO) to support smart contracts. UTXObased designs influence transaction scripting, fee calculation, and state management, affecting both development and scalability considerations.