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What is a UTXO
UTXO: Unspent Transaction Output.

User-defined UTXOs: You can select specific UTXOs when sending a transaction, use a more economical COMBINATION of UTXOs, or use specific UTXOs to conduct a transaction.

Bitcoin transactions are made up of transaction inputs and transaction outputs. Utxos are part of the transaction inputs and outputs. Each transaction consumes the old UTXOs and creates a new ONE. UTXO is short for Unspent Transaction Output.

BTC's UTXO model is very different from ethereum's or bank card's account/balance model. The UTXO-BASED BTC balance is the sum of the BTC numbers in several UTXOs.

Such as:

A transfers 1BTC to B

C transfers 0.5BTC to B

At this time, B's BTC address has two UTXOs, B's balance is 1.5BTC, and B's wallet has two UTXOs available, which are as follows:



If the account/balance model is used, for example, Ethereum stores a summary ETH balance in the account, i.e. 1.5ETH.

Utxos are similar to notes in different denominations in our wallets, such as five $100 bills and six $50...... The amount of money in the wallet is nothing more than the sum of the different denominations of the bills added up.

Once you understand the concept of UTXO, the process of transferring money using UTXO is easy to understand. When a transfer is made, the payment is EITHER UTXO or a combination of UTXO. In fact, the process of transferring money using UTXO is the same as the process of shopping and paying with paper money.

For example, in the above example, there are two UTXO in B's address, which are 1BTC and 0.5bTC respectively. Now, B wants to transfer 0.3BTC to D, so theoretically, B has two transfer schemes (for ease of understanding, the transfer fee is not considered for the moment) :

The first scheme: B transfers 0.3BTC to D using UTXO of 1BTC, and will receive 0.7bTC change;

The second scheme: B transfers 0.3BTC to D using UTXO of 0.5BTC, and will receive 0.2BTC change;

If B transfers 1.4BTC to D, both utXOs need to be spent, and then 0.1BTC change will be received. (Miners' fees have been omitted for the sake of explanation.)

The miner's fee depends on the type of wallet, the number of UTXOs spent, and the number of new UTXOs exported.

The BTC wallet of TokenPocket supports the function of user-defined UTXO, that is, in the transfer transaction, the user can independently choose the specific UTXO to be used, so as to use a more economical UTXO combination or specify a specific UTXO to be used for transaction, so as to save miners' fees and other purposes.

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