A UTXO, which stands for ‘Unspent Transaction Output’, is that amount of cryptocurrency obtained by the recipient, or held by the sender, following a transaction on certain blockchains (such as Bitcoin’s); the amount of each UTXO can then be ‘spent’ on a new exchange. The balance of a crypto wallet is, therefore, the sum of all UTXOs not yet used.

Let us describe with an example how the UTXO model works: Anna has 1 Bitcoin in her wallet and wants to transfer 0.4 BTC to Beatrice; the transaction will not move the exact amount, but will have as input 1 BTC, which will then be divided into 0.4 Bitcoin to be sent to Beatrice and 0.6 to be returned to Anna. The separate outputs of 0.4 BTC and 0.6 BTC, thus generated, represent two UTXOs, which can be inputs for future transactions.

In this regard, the single BTC in the example consisted of only one UTXO, as it was the ‘whole’ result of past exchanges, so it had to be split; however, if Anna had already obtained a 0.4 BTC UTXO from previous transactions, she could send it directly to Beatrice. Conversely, if Anna wanted to send 1 ‘whole’ Bitcoin, but did not have a UTXO of that amount, she could use a 0.7 BTC UTXO and a 0.3 BTC UTXO, again obtained from previous transactions. The input UTXOs, in fact, can also be ‘summed’ to produce an output with a higher value.

The mechanism is therefore very similar to that of purchases in fiat currency, such as the Euro: UTXOs are equivalent to the change we receive when we pay for an object with an amount of money higher than its actual cost, because we do not have notes or coins of the right denomination. For example, we cannot ‘split’ a 10€ note to pay for an item costing 5€, so we will receive 5€ as change, which can be used for future purchases.

Returning to the crypto world, the sender signs each transaction with their private key, so as to ‘unlock’ the UTXOs they possess, also indicating the recipient’s wallet address or public key. This allows transactions to be traced: the UTXOs represent a ‘chain of ownership’, being the beginning and end of each transaction. The ‘history’ of a UTXO, in fact, allows it to be traced back to the miner who, in the first place, received it as a reward from mining.

In addition, each node in the blockchain network keeps an up-to-date register (set) of all UTXOs existing at a given time and their owners. Altogether, the set of UTXOs collects a number of coins equal to the total supply of that cryptocurrency.

In this way, nodes can check the validity of a transaction: they always check that the input quantity is equal to or greater than the sum of the outputs, thus preventing users from spending the same UTXOs twice, an illegal action called double spending.

The UTXO model, however, is not exploited by all blockchains: Ethereum, for instance, exploits the account model to manage wallet balances and transactions on the network.

Correlated words


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Mining difficulty

Mining difficulty reflects the complexity of the cryptographic problems that must be solved to mine a block in networks like Bitcoin.

Layer 2

Layer 2 protocols operate on top of an existing blockchain to enhance network scalability and efficiency, improving transaction speeds.

Account Model

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Royalties are payments made to the creators of NFTs for each subsequent sale, providing ongoing compensation.

Multisig Wallet

A Multisig (Multi-signature) wallet requires multiple private keys to authorize cryptocurrency transactions, enhancing security.

Custodial Wallet

A Custodial wallet is a cryptocurrency wallet where third parties maintain custody of the owner's private keys.

Seed phrase

A Seed Phrase is a series of 12 or 24 words used to recover access to a cryptocurrency wallet, acting as a backup tool.

Non custodial wallet

A non-custodial wallet is a cryptocurrency wallet where the owner maintains complete control over their private keys.

Fan Token

Fan Tokens are specialised utility tokens that enable sports teams to engage and interact with their fan base.


Minting is the process of creating and registering new digital assets, such as tokens or NFTs, on a blockchain.

NFT Domains

NFT Domains are unique, decentralised internet domains, managed by smart contracts and recorded on a blockchain.


The Metaverse is a digital platform offering immersive, shared experiences in a virtual online environment, often integrating blockchain.

Delegated Proof-of-Stake

Delegated Proof-of-Stake is a system where stakeholders transfer their staking power to trusted validators who maintain the network.

Pure Proof-of-Stake

Pure Proof-of-Stake is a consensus model where validators are selected randomly and anonymously, using Verifiable Random Functions (VRF).

Liquid Proof-of-Stake

Liquid Proof-of-Stake is a variant of Proof-of-Stake where staked tokens remain liquid and readily accessible for transactions.


The Stake represents the total cryptocurrency users are currently staking within a blockchain network to gain rewards.

Staking Pool

A Staking Pool combines the cryptocurrencies of several individuals to increase collective staking power and potential rewards.

Cold Staking

Cold Staking involves securing cryptocurrency in a cold wallet, not connected to the internet, for staking purposes to enhance security.


Blockchain technology, based on cryptography, enables the decentralized and uncensored execution of transactions across various sectors.


Proof-of-Stake is a blockchain consensus method where validators stake their cryptocurrencies to participate in network governance.

Genesis Block

The Genesis Block, often called Block 0, is the inaugural block of a blockchain, serving as the foundation of the entire chain.

Block Height

Block Height refers to the total number of blocks in a blockchain, counted from the genesis block to the most recent block.


The Network in blockchain refers to the interconnected system of computers, or nodes, supporting the operations of a cryptocurrency.

Transactions per second (TPS)

Transactions per second (TPS) measures the processing speed of a blockchain network, indicating its efficiency and scalability.


A Transaction is a formal agreement involving the exchange of assets, value, or data between digital or physical entities.


In blockchain, Shard refers to a network subdivision that enhances transaction processing efficiency and overall network scalability.


Proof-of-work is a blockchain consensus mechanism relying on miners' computational power to validate transactions and create blocks.


A Node refers to a computer connected to a blockchain network, playing a crucial role in processing and validating transactions.


Off-chain transactions refer to activities conducted outside the blockchain, enhancing speed and reducing congestion.


On-chain activities are those executed and recorded on the blockchain, ensuring transparency and permanence of the data.

Mining Pool

A Mining Pool is a collective that combines multiple miners' computational power to enhance cryptocurrency mining efficiency.


Mining involves solving complex cryptographic challenges to create new blocks on a blockchain, earning cryptocurrency rewards.

Consensus Mechanism

A Consensus Mechanism is a decentralised method for validating transactions on a blockchain, crucial for maintaining network integrity.


A Hash is a cryptographic function uniquely identifying each blockchain block, ensuring data integrity and security.


In cryptocurrency, Governance refers to the systems and rules guiding the operation and decision-making of projects and blockchains.


A Fee is a charge incurred for executing financial transactions, often seen in trading, banking, and service provisions.

Double Spending

Double Spending is a risk in digital payment systems, where the same amount might be fraudulently spent twice without proper safeguards.


A Denial of Service (DoS) is a cyber attack aimed at making a network or service unavailable, disrupting normal operations.


Distributed Ledger Technologies (DLT) are based on a decentralised and immutable ledger of transactions, shared across a network.


A system is called Decentralised when it is governed by consensus among participants without a central authority or hierarchy.

Cold Wallet

Wallets that are not connected to the internet.


A Bridge in blockchain technology enables the transfer and interaction of assets across diverse blockchain platforms.

Financial Bubble

A Financial Bubble is an economic cycle characterised by the rapid escalation of asset prices beyond their intrinsic values.

Blockchain Explorer

Blockchain Explorer is a software tool that enables users to view all transactions and exchanged data on a specific blockchain.


A Block is a collection of encrypted transactions, which, linked with other blocks, forms the entire structure of a blockchain.


ASICs are specialized devices designed for mining specific cryptocurrencies, offering enhanced efficiency in computational tasks.


Interoperability in blockchain refers to exchanging data with other platforms, including different blockchain types and off-chain systems.

51% Attack

A 51% Attack occurs when a node or group of nodes tries to gain majority control over a blockchain network, threatening its integrity.

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