unspentoutput

An unspent transaction output, often abbreviated as UTXO, is a fundamental concept in blockchain technology, particularly in cryptocurrencies like Bitcoin. It represents a unit of cryptocurrency that has been received but not yet spent. When a transaction is broadcast to the network, it references previous UTXOs as input to create new UTXOs as output. These outputs then become available for spending in subsequent transactions.

Think of UTXOs like digital coins or banknotes. When you receive a payment, you get a new set of these coins. To spend them, you need to present the specific coins you received as input for your new transaction. The sum of the values of the input UTXOs must be equal to or greater than the value of the output UTXOs, with any difference usually being a transaction fee paid to the network miners.

The UTXO model, as opposed to an account-based model, means that each transaction is a complete record of what is being spent and what is being created. This provides a transparent and verifiable ledger of all transactions. The state of the blockchain is essentially the collection of all unspent transaction outputs. When a UTXO is spent, it is removed from this collection.