What are UTXOs?

1. What does UTXO stand for?
UTXO stands for Unspent Transaction Output. It represents the amount of cryptocurrency that has been received but not yet spent by the owner of a specific address.

2. How do UTXOs work in blockchains like Litecoin and Bitcoin?
When someone receives cryptocurrency, the received amount is recorded as a UTXO. This UTXO can later be used as input in a new transaction, where it will become "spent" and a new UTXO may be created for the change.

3. Are UTXOs the same as account balances?
No, UTXOs are not account balances. Instead, they are specific pieces of cryptocurrency stored as transaction outputs. The sum of all UTXOs associated with an address represents the total spendable amount for that address.

4. What is the importance of UTXOs in blockchain transactions?
UTXOs are essential for facilitating transactions on UTXO-based blockchains like Litecoin and Bitcoin. They ensure that each transaction is properly accounted for, using existing outputs as inputs to new transactions.

5. What happens if I spend part of a UTXO?
UTXOs are indivisible, meaning you cannot spend just part of a UTXO. If the amount you want to spend is less than the total UTXO value, the difference (change) will be sent back to you as a new UTXO.

6. How can I track my UTXOs?
You can track UTXOs associated with your Litecoin or Bitcoin address by using blockchain explorers or APIs, like the ones available under the LiaaS Enterprise Plan. This helps users retrieve detailed UTXO information for their transactions.

7. Why are UTXOs important in proof-of-work (POW) blockchains?
UTXOs are a fundamental part of POW blockchains like Bitcoin and Litecoin. They ensure efficient transaction processing, prevent double-spending, and facilitate secure, decentralized financial systems by using unspent outputs as new transaction inputs.