Term
UTXO
A UTXO (Unspent Transaction Output) is a discrete chunk of cryptocurrency locked to a specific address — Bitcoin and other UTXO-model chains do not track account balances directly; a wallet's balance is the sum of its unspent outputs.
The UTXO (Unspent Transaction Output) model is how Bitcoin, Litecoin, and similar chains structure their ledger. Instead of tracking address balances directly, the chain tracks discrete "outputs" — chunks of coins created by previous transactions. Your wallet's balance is the sum of all UTXOs locked to addresses controlled by your private keys.
When you spend, you consume one or more UTXOs entirely and create new outputs: one for the recipient, and (usually) one for yourself as "change." That change is what shows up in a new address that your wallet controls — which is why Bitcoin transactions often show a second output going back to you.
The UTXO model contrasts with the account model (Ethereum, Solana, TRON), where balances are just numbers in a global ledger and there is no change output. UTXOs give better privacy properties (no persistent address balance to cluster) but require wallets to do "coin selection" — picking which UTXOs to spend — which affects fees and privacy.
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