npub10p…mn2l2 on Nostr: Let's talk about the 2 ways to track user balances on decentralized networks. Time ...

Let's talk about the 2 ways to track user balances on decentralized networks. Time for a #decodingbitcoin post:

1. Account Model (Ethereum): Tracks balances like a bank ledger (simple and intuitive).

2. UTXO Model (Bitcoin): Tracks specific unspent outputs from transactions (complex but powerful)



The account model is like your bank statement. Simple to understand and works well with smart contracts. The downside is it's less private and can be vulnerable to replay attacks.



The UTXO model is like bills in a wallet. UTXOs (unspent transaction outputs) can only be spent once. Each transaction creates new UTXOs, and your balance is the sum of all your unspent UTXOs



This model has better privacy, prevents double spending, and allows for parallel transaction processing. The cons are it's more difficult to understand, is harder for complex applications, and requires UTXO management.

Here's a comparison chart of the two models:



This material is from Decoding Bitcoin, your go-to resource for understanding #bitcoin, privacy, and decentralization.

If you enjoyed it, visit https://bitcoindevs.xyz/decoding for the full lesson, and follow us for more free educational #bitcoin content!