Understanding UTXO: Key Role and Mechanism in the Qitmeer Network
What is UTXO?
UTXO (Unspent Transaction Outputs) is a fundamental concept in both Bitcoin and the Qitmeer Network, representing transaction outputs that have not yet been spent.
In the Qitmeer Network, each transaction is composed of inputs and outputs, where UTXOs are the parts of these transactions that remain unspent. They act as the outputs for new Meer coin transactions, serving as the basic building blocks of transactions.
Unlike the traditional “account-balance” model used by banks, the Qitmeer Network utilizes the UTXO model to track value. Each UTXO is indivisible and, once spent, generates new UTXOs.
This UTXO model ensures the transparency and security of Qitmeer Network transactions, effectively preventing double-spending.
Coinbase Transactions and Output Transactions
In the Qitmeer Network, certain special Meer coin transactions are called coinbase transactions or genesis transactions.
These transactions generate new Meer coins and reward miners for completing Proof of Work (PoW), serving as a primary source of new Meer coins.
The new Meer coins generated through coinbase transactions reward miners for maintaining and securing the network, ensuring their continued support and motivation.
To view the first coinbase transaction in the Qitmeer Network, you can use meerscan:
Inputs and Outputs in Regular Transactions
The core of the UTXO model is that each UTXO input originates from a previous UTXO output, except for coinbase transactions, which only have outputs and no inputs.
Once a UTXO is created, it is indivisible and can only be spent as a whole. Spending a UTXO results in the creation of new UTXOs, facilitating the transfer of Meer coin value.
For example:
- Transaction 1: Input of 5 Meer coins, outputs of 4 and 1 Meer coin.
- Transaction 2: Input of 3 Meer coins, outputs of 0.5 and 2.4 Meer coins.
- Transaction 3: Inputs from the outputs of Transactions 1 and 2, totaling 1.5 Meer coins.
This model ensures the traceability and security of each transaction, effectively preventing double-spending and making value transfers transparent and secure.
UTXO Changes in the Qitmeer Network
Example: Alice Transfers Meer Coins to Bob
- Creating a UTXO: Alice mines 8.7866 Meer coins, creating a UTXO from a coinbase transaction.
- Initiating a Transaction: Alice uses the 8.7866 Meer coins as input, specifying Bob’s address as the output, and signs the transaction with her private key to prove its authenticity.
- Confirming the Transaction: Once the transaction is confirmed by the network, Alice’s UTXO becomes 0, while Bob’s address gains a new UTXO containing 8.7866 Meer coins.
Through this process, Alice successfully transfers 8.7866 Meer coins to Bob, involving the creation, spending, and generation of new UTXOs.
To view transactions between Alice and Bob, an example using meerscan:
The address has a “balance” of 302017.22 Meer coins, indicating the address’s UTXO, representing 302017.22 Meer coins in unspent transaction outputs.
Basic Principles and Functions of the UTXO Model
The UTXO model ensures the security and traceability of the Qitmeer Network. Under this model, the source of Meer coins must be a UTXO from a previous transaction, except for mining rewards. Each transaction must balance inputs and outputs to prevent double-spending.
By verifying each transaction’s signature, the UTXO model effectively prevents double-spending and ensures transaction legitimacy. This model relies on the UTXO information stored by network miners and the signature verification mechanism to ensure the secure operation of the Qitmeer Network.
