UTXO, short for unspent transaction output, represents any amount of cryptocurrency that remains after the successful completion of a transaction. The technical term denotes a portion of a whole cryptocurrency that does not get spent after a transaction.
It is used as an accounting measure and is processed at the beginning (input) and end (output) of each transaction on a blockchain network. UTXOs get processed continuously at the start and end of every transaction.
After the completion of a transaction, the unspent amount which makes up the UTXO gets recorded into a database for later use in future transactions. Note that the unspent UTXO amount cannot be used until it gets recorded in the database.
UTXO also stands for an SRC-20 token, which represents a specific amount of spendable Bitcoin, encapsulated within a token on the UTXO site. Each token, or UTXO, is assigned a Bitcoin value and comes with a script that defines the conditions under which it can be spent. This tokenization approach aims to facilitate transactions by verifying and incorporating them into the blockchain, where used UTXOs are then replaced by new ones created in the transaction process.
