Explain UTXO in Bitcoin like I'm 15

Imagine you have a wallet with some Bitcoin in it. Now, these Bitcoin are not like physical coins or notes you can hold in your hand. Instead, they exist as digital units on the #Bitcoin network.

UTXO stands for "Unspent Transaction Output"

It's like keeping track of how much Bitcoin you have in your wallet. Whenever someone sends you Bitcoin, it creates a new UTXO for you. This UTXO represents the specific amount of Bitcoin you received.

Now, when you want to send Bitcoin to someone else, you need to use one or more UTXOs. Think of it as if you're breaking down a larger bill into smaller ones to pay for something.

For example, if you received 10 Bitcoin and you want to send 3 Bitcoin to a friend, you'll use one of your 10 Bitcoin UTXOs and create a new UTXO for your friend with the remaining 7 Bitcoin.

The cool thing is, once a UTXO is used in a transaction, it becomes "spent" and cannot be used again. It's like crossing it off your list of available funds. This ensures that people can't spend the same Bitcoin twice.

That's the basic idea of UTXO in Bitcoin. It's all about keeping track of how much Bitcoin you have and using those UTXOs to send or receive Bitcoin securely. 🤑💸