UTXO
Also: Unspent Transaction Output
network · intermediate
An unspent transaction output — a discrete chunk of bitcoin sitting at an address, waiting to be spent in full.
Bitcoin doesn't track account balances the way a bank does. It tracks unspent transaction outputs — UTXOs. Each UTXO is a specific amount of bitcoin locked to a specific spending condition (usually "whoever can sign for this address"). Your wallet's "balance" is the sum of every UTXO it controls.
When you spend, you consume whole UTXOs as inputs and create new UTXOs as outputs. If you have one UTXO worth 0.5 BTC and want to send 0.3, the transaction consumes the 0.5 input and produces two outputs: 0.3 to the recipient and ~0.2 back to you as change. Nodes verify that inputs ≥ outputs (the difference is the fee) and that the spending condition on each input is satisfied.
The UTXO model has consequences. It makes transactions trivially parallelizable to verify, because UTXOs are independent. It complicates privacy — change outputs link your spending history together — and motivates patterns like coinjoin and careful coin selection. And it differs from Ethereum's account model, which more closely resembles a bank ledger but loses some of these properties.