A Deterministic UTXO Ledger is a type of distributed ledger system where the state of all assets is precisely and unambiguously derived from a set of unspent transaction outputs. Every valid transaction consumes specific UTXOs and creates new ones, ensuring a clear, traceable, and unalterable record of ownership. This architecture guarantees that any node can independently verify the current state of the ledger by processing all transactions from its genesis.
Context
This ledger structure, notably utilized by Bitcoin, is often discussed in crypto news regarding its security properties, auditability, and implications for privacy and smart contract functionality. Its deterministic nature offers strong assurances against double-spending and simplifies state verification, a critical aspect for digital asset integrity. Debates often compare its characteristics with account-based models, particularly concerning scalability and programmability in decentralized finance.
Cooperative Consensus on a DAG ledger enables token holders to secure the network directly, fundamentally solving the centralization and scalability trade-offs of traditional proof-of-stake.
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