Unspent Transaction Output (UTXO) refers to the remaining portion of a cryptocurrency transaction that has not been spent and can be used as input for future transactions. In the UTXO model, each transaction consumes previous outputs as inputs and creates new outputs, representing the transfer of digital assets. This model is fundamental to Bitcoin's transaction architecture, where each UTXO represents a specific amount of Bitcoin that belongs to an address and can be spent in a future transaction.
The UTXO model ensures transparency and security in blockchain networks by tracking the ownership and availability of funds. When a transaction is created, it must reference existing UTXOs as inputs, ensuring that the funds being spent are valid and haven't already been used in another transaction. This system also prevents double-spending, a critical issue in digital currencies, by ensuring that once a UTXO is spent, it can no longer be used in another transaction.
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In the context of Plena Wallet, while it operates on networks like BNB, Polygon, and others that may not strictly follow the UTXO model (they often follow an account-based model like Ethereum), understanding UTXOs is still relevant when interacting with UTXO-based blockchains. For example, when transacting on Bitcoin or similar chains, Plena Wallet users would essentially be spending their unspent transaction outputs.
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