UTXO Account

The Unspent Transaction Output (UTXO) model is another account type within BlockDAG, designed for efficient transaction processing. Unlike EVM accounts, which track balances, UTXO-based accounts work by consuming existing transaction outputs and creating new ones, ensuring traceable and verifiable transaction history.

How UTXO Works in BlockDAG:

• Inputs and Outputs: Each transaction references previous UTXOs (unspent outputs from past transactions) as inputs, and new UTXOs are created as outputs.

• Transaction Verification: Nodes verify that inputs match outputs and that no double-spending occurs.

• Parallel Processing: Since UTXOs are independent, transactions can be validated in parallel, improving scalability.

Key Features of UTXO-Based Accounts:

• Enhanced Privacy: Each transaction generates new UTXOs, preventing direct linking of funds to previous transactions.

• Parallel Processing: Multiple transactions can be processed simultaneously, reducing network congestion.

• Efficient Transaction Verification: Since transaction inputs are spent and outputs are newly created, double-spending is prevented.