Unspent transaction output

In cryptocurrencies, an unspent transaction output (UTXO) is a distinctive element in a subset of digital currency models. A UTXO represents a certain amount of cryptocurrency that has been authorized by a sender and is available to be spent by a recipient. The utilization of UTXOs in transaction processes is a key feature of many cryptocurrencies, but it primarily characterizes those implementing the UTXO model. UTXOs employ public key cryptography to ascertain and transfer ownership. More specifically, the recipient's public key is formatted into the UTXO, thereby limiting the capability to spend the UTXO to the account that can demonstrate ownership of the corresponding private key. A valid digital signature associated with the public key must be included for the UTXO to be spent. UTXOs constitute a chain of ownership depicted as a series of digital signatures dating back to the coin's inception, regardless of whether the coin was minted via mining, staking, or another procedure determined by the cryptocurrency protocol. Prominent examples of cryptocurrencies adopting the UTXO model include Bitcoin and Cardano. Cardano utilizes an extended version of the UTXO model known as EUTXO. Cryptocurrencies that utilize the UTXO model function differently compared to those using the account model. In the UTXO model, individual units of cryptocurrency, termed as unspent transaction outputs (UTXOs), are transferred between users, analogous to the exchange of physical cash. This model impacts how transactions and ownership are recorded and verified within the blockchain network. In the UTXO model, each unit of currency is treated as a discrete object. The history of a UTXO is documented only within the blocks where it is transferred. To ascertain the total balance of an account, one must scan each block to find the latest UTXOs linked to that account. While all nodes within a blockchain network must consent on the block history, the blocks relevant to an account's balance are unique to that account.