UTXO Model Overview

Transaction Processing

The UTXO (Unspent Transaction Output) model is foundational to the BSV blockchain, enabling an approach to transaction processing following the original Bitcoin protocol .

• Each UTXO acts like an individual coin or bill, allowing for independent spending.

• This model supports parallelized transaction processing, akin to digital cash, where multiple transactions can occur simultaneously without conflicts.

• Transactions are validated based on the consumption of UTXOs, ensuring that each transaction is atomic—either fully valid or entirely rejected.

Inputs and Outputs

Every transaction in the UTXO model consists of inputs and outputs, which are essential for transferring ownership of funds.

• Inputs: Each input references a previous UTXO and includes an unlocking condition, allowing the specified UTXO to be spent.

• Outputs: Each output defines a value and a locking condition, securing the tokens for the new owner.

• A transaction is structured with a version number, a list of inputs, a list of outputs, and a lock time value, which facilitates non-final transactions and payment channels.

• Outputs that remain unspent become new UTXOs, available for future transactions.