UTXO (Unspent Transaction Output)
Bitcoin's accounting model: your balance is a set of discrete unspent 'coins,' not a single running total.
A UTXO is a chunk of Bitcoin left over from a previous transaction that can be spent as an input to a new one. Bitcoin doesn’t track balances like a bank account; instead your wallet holds a collection of UTXOs, and spending means consuming whole UTXOs and creating new ones (including change back to yourself).
The model explains several things newcomers find odd: why fees depend on how many UTXOs you’re combining, why dust matters, and how privacy leaks through UTXO linkage. It also underpins powerful on-chain analysis — because each UTXO records when its coins last moved, analysts can measure the age and cost basis of the entire supply.