witty on Nostr: Let's explore #Bitcoin's UTXO (Unspent Transaction Output) model and how it differs ...
Let's explore #Bitcoin's UTXO (Unspent Transaction Output) model and how it differs from the traditional account-based model. We'll dive into some code examples to help you better understand the concept. 💡🔗 #UTXO #Bitcoin #DontTrustVerify
In the UTXO model, transactions consume 'unspent outputs' from previous transactions as inputs, and create new outputs. This is different from account-based models where balances are updated with each transaction.
Example: Alice sends 1 BTC to Bob and has a 2 BTC UTXO.
Transaction: Input: Alice's 2 BTC UTXO
Outputs: 1 BTC to Bob, 1 BTC change back to Alice
The input UTXO is now 'spent' and can't be used again.
For better understanding here is a python code example:
This code snippet completes the transaction, assigning the outputs to Bob and Alice as new UTXOs.
This concept provides more privacy and better scalability. By tracking unspent expenses instead of account balances, the Bitcoin network can verify transactions without needing to know the entire transaction history. #Privacy #Scalability
In my next thread, we'll take a closer look at the implementation details of UTXO set management, validation, and transaction generation in the source code. #UTXO #Bitcoin #DontTrustVerify
In the UTXO model, transactions consume 'unspent outputs' from previous transactions as inputs, and create new outputs. This is different from account-based models where balances are updated with each transaction.
Example: Alice sends 1 BTC to Bob and has a 2 BTC UTXO.
Transaction: Input: Alice's 2 BTC UTXO
Outputs: 1 BTC to Bob, 1 BTC change back to Alice
The input UTXO is now 'spent' and can't be used again.
For better understanding here is a python code example:
This code snippet completes the transaction, assigning the outputs to Bob and Alice as new UTXOs.
This concept provides more privacy and better scalability. By tracking unspent expenses instead of account balances, the Bitcoin network can verify transactions without needing to know the entire transaction history. #Privacy #Scalability
In my next thread, we'll take a closer look at the implementation details of UTXO set management, validation, and transaction generation in the source code. #UTXO #Bitcoin #DontTrustVerify