Post
Topic
Board Nigeria (Naija)
Merits 12 from 3 users
Topic OP
How Bitcoin Uses UTXOs Instead of Balances
by
I_Anime
on 29/07/2025, 19:10:40 UTC
⭐ Merited by Mia Chloe (8) ,Igebotz (3) ,Felicity_Tide (1)
I know many here think that in their bitcoin wallet the  balance showing are bitcoin. But nah is not bitcoin rather is UTXOs which stand for ( Unspent transaction Output ) . I am going to use this post to break it down for folk here (I know shey some of nah Dey aware already)on how it works , for those that don’t this is how it works .

Let me say Mr A received BTC from three separate transactions,

1st 0.5 BTC

2nd 0.3 BTC

3rd 0.2BTC
 
So those BTC above shows that Mr A has three UTXOs , totaling will be 1 BTC . So Aslong he never spend anything Mr A is still holding his UTXO until sending to another wallet as coin if am not mistaken.

So for instance Mr A want to do any transactions , like for instance 0.85 BTC . He go need to choose enough UTXO wey go fit cover that exact transaction of  0.85 BTC so e got use the three UTXO wey Dey he wallet  as his new input inorder to coverup the 0.85 transactions . Then create 2 new outputs , one to the person his sending 0.85 BTC to while the other to himself as change of 0.15 BTC (the remaining digit wey go Dey show for the balance after the transaction).