Episode notes
“There is no such thing as a balance; Bitcoin is not a bank account… its actually a collection of UTXOs.”
— Shinobi
Location: Remotely
Date: Tuesday 15th December
Company: Block Digest
Role: Host
Checking your balance or sending Bitcoin can be as simple as opening an app or scanning a QR code and clicking send, but what is happening behind the scenes to make that happen?
Unspent transaction outputs (UTXOs) are the monetary units of bitcoin. They are likes coins and notes in the traditional financial system but can be of any value.
When accessing a wallet, the software creates your balance by totalling the value of all your UTXOs, and when you want to send someone bitcoin, your wallet selects the UTXOs required to make up the amount you want to send.
In many cases, wallet software abstracts away UTXOs so that the user does not have to consider them. However, it is a crucial part of the system that, when properly used, can help protect your privacy and reduce your transaction fees.
In this interview, I talk to Shinobi, the host of Block Digest. We discuss UTXOs, what they do, how they work and the implications for both privacy and transaction fees.
This episode’s sponsors:
Kraken - The best place to buy, sell & trade Bitcoin
BlockFi - The future of Bitcoin financial services
Sportsbet.io - Online sportsbook & casino that accepts Bitcoin
Casa - The leading provider of Bitcoin multisig key security.
Exodus - The world's leading Desktop, Mobile and Hardware crypto wallets.
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