The UTXO accounts model, or Unspent Transaction Output model, is a method for tracking cryptocurrency ownership where each transaction consumes specific unspent outputs from previous transactions and creates new unspent outputs. Instead of maintaining a balance in an account, a user’s total holdings are the sum of all UTXOs they control. This model ensures clear ownership and transaction finality.
Context
This model is foundational to Bitcoin and many other cryptocurrencies, offering distinct advantages in terms of privacy and transaction verification compared to account-based models. News often contrasts the UTXO model with account-based systems, discussing their respective implications for scalability, smart contract functionality, and transaction batching. Understanding UTXOs is essential for comprehending the technical underpinnings of these digital assets.
The introduction of Distributed Vector Commitments allows validators to cryptographically verify transactions against a short block commitment, eliminating massive state storage.
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