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Blockchain General

UTXO Model

The accounting model used by Bitcoin (and derived chains like Litecoin and Zcash) where balances are represented as a set of unspent transaction outputs rather than account balances. Each transaction consumes one or more UTXOs as inputs and creates new UTXOs as outputs; the difference between input and output values constitutes the transaction fee. The UTXO model enables natural parallelism and simple verification but makes stateful smart contracts more complex compared to account-based models like Ethereum or Solana.

IDutxo-modelAliasUnspent Transaction OutputAliasUTXO
Plain meaning

Plain meaning

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The accounting model used by Bitcoin (and derived chains like Litecoin and Zcash) where balances are represented as a set of unspent transaction outputs rather than account balances. Each transaction consumes one or more UTXOs as inputs and creates new UTXOs as outputs; the difference between input and output values constitutes the transaction fee. The UTXO model enables natural parallelism and simple verification but makes stateful smart contracts more complex compared to account-based models like Ethereum or Solana.

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UTXO Model (utxo-model)
Category: Blockchain General
Definition: The accounting model used by Bitcoin (and derived chains like Litecoin and Zcash) where balances are represented as a set of unspent transaction outputs rather than account balances. Each transaction consumes one or more UTXOs as inputs and creates new UTXOs as outputs; the difference between input and output values constitutes the transaction fee. The UTXO model enables natural parallelism and simple verification but makes stateful smart contracts more complex compared to account-based models like Ethereum or Solana.
Aliases: Unspent Transaction Output, UTXO
Related: Bitcoin, Bitcoin Script
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Branch

Bitcoin

The first decentralized cryptocurrency network, launched in 2009 by the pseudonymous Satoshi Nakamoto, using a Proof-of-Work consensus mechanism and a UTXO-based transaction model. Bitcoin's protocol enforces a fixed supply cap of 21 million BTC, with new coins issued through mining block rewards that halve approximately every four years. It serves as both a peer-to-peer electronic cash system and a store of value, with its scripting language enabling basic programmability such as multisig and timelocks.

Proof of Work (PoW)Bitcoin Halving
Open term
Branch

Bitcoin Script

Bitcoin's stack-based, intentionally non-Turing-complete scripting language used to define spending conditions for transaction outputs. Scripts are composed of opcodes that manipulate a stack to evaluate whether a transaction is authorized, supporting operations like signature verification (OP_CHECKSIG), multisig (OP_CHECKMULTISIG), timelocks (OP_CHECKLOCKTIMEVERIFY), and hash preimage checks. Its deliberate limitations (no loops, bounded execution) minimize attack surface.

OP_CATTaproot
Open term
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Blockchain General

Bitcoin

The first decentralized cryptocurrency network, launched in 2009 by the pseudonymous Satoshi Nakamoto, using a Proof-of-Work consensus mechanism and a UTXO-based transaction model. Bitcoin's protocol enforces a fixed supply cap of 21 million BTC, with new coins issued through mining block rewards that halve approximately every four years. It serves as both a peer-to-peer electronic cash system and a store of value, with its scripting language enabling basic programmability such as multisig and timelocks.

Open term
Blockchain General

Bitcoin Script

Bitcoin's stack-based, intentionally non-Turing-complete scripting language used to define spending conditions for transaction outputs. Scripts are composed of opcodes that manipulate a stack to evaluate whether a transaction is authorized, supporting operations like signature verification (OP_CHECKSIG), multisig (OP_CHECKMULTISIG), timelocks (OP_CHECKLOCKTIMEVERIFY), and hash preimage checks. Its deliberate limitations (no loops, bounded execution) minimize attack surface.

Open term
Blockchain General

Validator Economics

The financial model governing validator profitability including staking rewards (inflation), transaction fee revenue, MEV tips, and operational costs (hardware, bandwidth, data center). On Solana, validators earn ~6-7% APY from inflation plus priority fees and Jito MEV tips, offset by costs of running high-spec hardware.

Open term
Blockchain General

Unified Address

A Zcash address format (ZIP 316) that bundles multiple receiver types (transparent, Sapling, Orchard) into a single 'u1'-prefixed address, allowing the sender's wallet to automatically select the most private payment method. Unified Addresses eliminate the complexity of managing separate transparent and shielded addresses, and support diversified addresses for unlinkable payment reception from a single spending key.

Open term
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Blockchain Generalshielded-transaction

Shielded Transaction

A Zcash transaction where sender address, receiver address, and amount are encrypted using zk-SNARKs, providing cryptographic privacy while allowing network nodes to verify validity without learning private details. Shielded transactions operate within dedicated value pools (Sapling or Orchard), each with independent circuit designs. Users can selectively disclose transaction details to third parties using viewing keys without compromising spending authority.

AliasPrivate Transaction (Zcash)
Open term
Blockchain Generalblob-transaction

Blob Transaction (EIP-4844)

An Ethereum transaction type introduced in the Dencun upgrade (March 2024) that carries binary large objects (blobs) of temporary off-chain data. Each blob is 128 KB, committed via KZG polynomial commitments, and stored for ~18 days before pruning. Blob transactions created a separate fee market and reduced Layer 2 rollup fees by 10-100x by providing cheap, temporary data availability.

AliasBlobAliasEIP-4844
Open term
Blockchain Generaltransaction-fee-general

Transaction Fee

The cost paid by the sender to have a transaction processed and included in a block. Fees compensate validators/miners for computation and prevent spam. Fee models vary: Ethereum uses dynamic gas pricing (EIP-1559 base fee + tip), Solana uses base fee (5,000 lamports) + optional priority fee, Bitcoin uses fee-per-byte.

Open term
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Blockchain Generalbitcoin

Bitcoin

The first decentralized cryptocurrency network, launched in 2009 by the pseudonymous Satoshi Nakamoto, using a Proof-of-Work consensus mechanism and a UTXO-based transaction model. Bitcoin's protocol enforces a fixed supply cap of 21 million BTC, with new coins issued through mining block rewards that halve approximately every four years. It serves as both a peer-to-peer electronic cash system and a store of value, with its scripting language enabling basic programmability such as multisig and timelocks.

Open term
Blockchain Generalbitcoin-script

Bitcoin Script

Bitcoin's stack-based, intentionally non-Turing-complete scripting language used to define spending conditions for transaction outputs. Scripts are composed of opcodes that manipulate a stack to evaluate whether a transaction is authorized, supporting operations like signature verification (OP_CHECKSIG), multisig (OP_CHECKMULTISIG), timelocks (OP_CHECKLOCKTIMEVERIFY), and hash preimage checks. Its deliberate limitations (no loops, bounded execution) minimize attack surface.

Open term
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Blockchain General

Blockchain

A distributed, append-only ledger that records transactions in cryptographically linked blocks. Each block contains a hash of the previous block, forming an immutable chain. Nodes in the network maintain copies of the ledger and reach agreement through consensus mechanisms. Blockchains enable trustless, decentralized record-keeping without a central authority.

Open term
Blockchain General

Consensus Mechanism

The protocol by which nodes in a distributed network agree on the current state of the ledger. Common mechanisms include Proof of Work (Bitcoin), Proof of Stake (Ethereum, Solana), and BFT variants. Consensus ensures all honest nodes converge on the same transaction history despite potential network delays or malicious actors.

Open term
Blockchain General

Proof of Stake (PoS)

A consensus mechanism where validators are selected to produce blocks based on the amount of cryptocurrency they have staked (locked) as collateral. PoS is energy-efficient compared to Proof of Work. Misbehaving validators risk losing their stake (slashing). Solana, Ethereum (post-Merge), Cosmos, and Cardano use PoS variants.

Open term
Blockchain General

Proof of Work (PoW)

A consensus mechanism where miners compete to solve computationally expensive puzzles to produce blocks and earn rewards. PoW provides strong security (51% attack resistance) but is energy-intensive. Bitcoin and pre-Merge Ethereum use PoW. The difficulty adjusts to maintain target block times regardless of total network hash power.

Open term