Unspent Transaction Output (UTXO)
Beginner
Glossary
Nov 15, 2023
3 min read
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Detailed Summary
In the digital world of cryptocurrency, "Unspent Transaction Output" or UTXO is a term that's integral to the backbone of blockchain transactions, particularly within the Bitcoin protocol. As complex as cryptocurrency can seem, comprehending the UTXO concept is key to mastering the field. Let's dive deep into the world of UTXO and its impact on digital currency.
Unpacking Unspent Transaction Output (UTXO)
What Exactly Is UTXO?
Imagine you're at a cafe, and you pay with a $50 bill for a $3 coffee. You receive $47 back as change. This change is akin to what a UTXO is in the cryptocurrency realm. When you transact with Bitcoin, the 'change' you get back forms new UTXOs, which are poised for future spending.