m2carbine on Nostr: Imagine you have a bunch of different sized Lego blocks, and each block represents a ...
Imagine you have a bunch of different sized Lego blocks, and each block represents a certain amount of Bitcoin.
When you get some Bitcoin, it's like getting a new Lego block. But, when you want to send some Bitcoin to someone else, you need to use the Lego blocks you already have.
Let's say you want to send 10 Bitcoins to your friend, but you only have a 5-Bitcoin Lego block and a 7-Bitcoin Lego block. You can't just cut the blocks in half, so you need to use the whole 5-Bitcoin block and part of the 7-Bitcoin block.
When you do this, the 5-Bitcoin block gets used up completely, and the 7-Bitcoin block gets broken into two smaller blocks: one that's 3 Bitcoins (which you keep) and one that's 4 Bitcoins (which you send to your friend, along with the 5-Bitcoin block and 1 Bitcoin from another source to make the total of 10 Bitcoins).
The new blocks that get created when you break the bigger blocks into smaller ones are called "UTXOs" (Unspent Transaction Outputs). They're like the new, smaller Lego blocks that you can use to build something new.
So, UTXOs are just the small, leftover blocks of Bitcoin that you can use to make new transactions. Make sense?
When you get some Bitcoin, it's like getting a new Lego block. But, when you want to send some Bitcoin to someone else, you need to use the Lego blocks you already have.
Let's say you want to send 10 Bitcoins to your friend, but you only have a 5-Bitcoin Lego block and a 7-Bitcoin Lego block. You can't just cut the blocks in half, so you need to use the whole 5-Bitcoin block and part of the 7-Bitcoin block.
When you do this, the 5-Bitcoin block gets used up completely, and the 7-Bitcoin block gets broken into two smaller blocks: one that's 3 Bitcoins (which you keep) and one that's 4 Bitcoins (which you send to your friend, along with the 5-Bitcoin block and 1 Bitcoin from another source to make the total of 10 Bitcoins).
The new blocks that get created when you break the bigger blocks into smaller ones are called "UTXOs" (Unspent Transaction Outputs). They're like the new, smaller Lego blocks that you can use to build something new.
So, UTXOs are just the small, leftover blocks of Bitcoin that you can use to make new transactions. Make sense?