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Unspent Transaction Output (UTXO)

    Unspent transaction output (UTXO) is a data structure for the amount of cryptocurrency a user can spend and is used to track cryptocurrency balances. It is a fundamental element of Bitcoin and many other cryptocurrencies as it defines where each blockchain transaction starts and finishes. Cryptocurrency transactions are inputs and outputs. In the UTXO model, each user has a UTXO associated with their public key. When a transaction occurs, one or more of a user’s UTXOs serves as the input. The user then provides their digital signature to confirm ownership over those inputs, resulting in outputs. The UTXOs consumed are “spent” and no longer usable. Meanwhile, the outputs from the transaction become new UTXOs, which can be spent in a new transaction later.