Virtual Transaction Output

Definition ∞ A virtual transaction output represents a conceptual or logical output of a transaction that does not directly correspond to a physical unspent transaction output (UTXO) on the blockchain. These virtual outputs are often used in advanced scripting or layer-two protocols to manage complex state transitions or off-chain balances. They allow for more flexible and efficient transaction construction. This abstraction helps in building scalable solutions.
Context ∞ Virtual transaction outputs are a technical concept sometimes appearing in news related to advanced Bitcoin scripting, layer-two protocols, or other UTXO-based systems. Discussions often focus on their role in enabling more complex functionalities and improving transaction privacy or efficiency. Their implementation is crucial for certain scaling innovations.