UTXO vs Account Based

Two methods of tracking ownership and transaction history

A UTXO-based system (Unspent Transaction Output) and an account-based system are two different methods of tracking ownership and transactions in blockchain networks.

Key Differences

Granularity

  • UTXO-based transactions deal with discrete units (UTXOs), making it easier to handle microtransactions and avoid partial updates.

  • Account-based transactions directly update account balances, simplifying some aspects of transaction processing but making microtransactions impossible in practice.

State Management

  • UTXO-based state is a set of unspent transaction outputs, which can be verified independently.

  • Account-based state is a set of account balances, requiring more complex synchronization and validation.

Double-Spending

  • UTXO-based double-spending is prevented by tracking the state of each UTXO.

  • Account-based double-spending is prevented by ensuring the system balances out after every transaction.

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