UTXO
A UTXO is an unspent transaction output, a chunk of bitcoin that can be used as an input in a future transaction.
UTXO stands for unspent transaction output. In Bitcoin, balances are not stored as a single account number that goes up or down. Instead, the network tracks pieces of bitcoin created by past transactions that have not yet been spent. Each usable piece is a UTXO, and it is locked to a script, usually controlled by someone’s private key. To spend bitcoin, a wallet selects one or more UTXOs as inputs and creates new outputs for the recipient and, if needed, change back to the sender.
UTXOs matter because they are the basic units Bitcoin nodes verify to prevent double spending and calculate what coins are available to spend. A useful comparison is paying with cash: if you owe 0.03 BTC but only have a 0.05 BTC UTXO, your transaction spends the whole 0.05 BTC, sends 0.03 BTC to the recipient, and returns about 0.02 BTC minus fees as a new change UTXO. Wallets handle this automatically, but UTXO size and number can affect transaction fees and privacy.
Other terms in Bitcoin
ASIC
A specialized computer chip built to do one task very efficiently, commonly used in Bitcoin mining to perform hashing calculations.
BTC
The ticker symbol for bitcoin, the native currency of the Bitcoin network.
Bitcoin
A decentralized digital currency and payment network that lets people send value without relying on a bank or central authority.
Block Height
A block height is the number that shows a block’s position in a blockchain, counted from the first block.