UTXO

In plain words

UTXO means unspent transaction output: a chunk of bitcoin sent to you and not yet spent. Think bills in a pocket. Your balance is your chunks, added up. Spending works like cash — hand over a whole chunk, take change back if it's worth more than the payment. Every node tracks all unspent chunks and knows exactly what is spendable. No account. No clerk.

Why it matters

• No accounts to hack or freeze — just chunks locked to your keys.
• Change explained: pay with a big chunk, get a smaller one back.
• Nodes track only unspent chunks, which keeps checking fast.

Not to be confused with

• Bank balance — a single number the bank edits. Your bitcoin is separate pieces only your keys unlock.

Go deeper

• Transaction
• Keys & addresses
• Fees