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Tracking user balances in decentralized networks relies on two models:
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1 . ** Account Model** (Ethereum): Tracks balances like a bank ledger (simple and intuitive).
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- 2 . ** UTXO Model** (Bitcoin): Tracks specific unspent outputs from transactions— complex but powerful.
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+ 2 . ** UTXO Model** (Bitcoin): Tracks specific unspent outputs from transactions ( complex but powerful)
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@@ -61,13 +61,11 @@ Bob has three "bills" (UTXOs):
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- One 3 BTC UTXO
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- One 2 BTC UTXO
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- To spend 7 BTC, Bob must :
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+ To spend 7 BTC, Bob has multiple options :
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- 1 . Use the 5 BTC UTXO
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- 2 . Use the 3 BTC UTXO
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- 3 . Get 1 BTC back as "change" (new UTXO)
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- Key Points:
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+ 1 . Use the 5 BTC and 3 BTC UTXOs and receive 1 BTC back as 'change' (a new UTXO).
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+ 2 . Alternatively, use the 5 BTC and 2 BTC UTXOs without needing any change.
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+ Key Points:
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- UTXOs can only be spent once (like using a paper bill)
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- Each transaction creates new UTXOs
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