Traditional bank accounts maintain a single balance number (e.g. $100). When you spend $30, the bank updates the total balance to $70.
Bitcoin works differently using the UTXO (Unspent Transaction Output) model.
💵 Think of Cash Bills
Imagine having a $100 bill. You can’t tear off $30. Instead, you hand over the $100 bill, receive $70 in change, and end up with a new $70 bill.
In Bitcoin, every transaction consumes existing UTXOs as inputs and creates brand new UTXOs as outputs (including change back to yourself).
🧠 Today's Key Takeaway
- Bitcoin does not store account totals; it tracks discrete unspent outputs (UTXOs).
- Transactions spend whole UTXOs and generate new outputs plus change.
