Crypto Terms: Letter U

What is Unspent Transaction Output (UTXO)?

Unspent Transaction Output (UTXO) MEANING:
Unspent Transaction Output (UTXO) - the unspent cryptocurrency that returns to the wallet after a transaction.
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Let's find out Unspent Transaction Output (UTXO) meaning, definition in crypto, what is Unspent Transaction Output (UTXO), and all other detailed facts.

Unspent transaction output (UTXO) is the leftover output from a cryptocurrency transaction that was not used as input. Many cryptocurrencies, including Bitcoin (BTC), use inputs and outputs for their transaction mechanics.

Cryptocurrency transactions are completed using inputs and outputs. Inputs are addresses that the cryptocurrency is sent from at the start of the transaction, and the output is the address of the final destination.

During cryptocurrency transactions, the wallet does not send out only the specific amount. Instead, assets linked to the particular wallet address are converted into the input. Any unspent assets are returned back to the initial wallet as unspent transaction output. UTXO can be used in other transactions in the future.

If person A has 50 BTC and decides to send 10 BTC to person B, they must first unlock the 50 UTXOs in the wallet. All 50 coins are used as the transaction input. The transaction forwards 10 BTC to person B. The remaining 40 BTS return to the wallet belonging to person A as new UTXOs. Person B’s wallet now contains two separate UTXCOs – the previous balance and the additional coins sent by person A.

Validators can verify that a transaction is valid if the total number of inputs is equal to or higher than the number of outputs. This mechanism ensures that users do not double-spend their assets.