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what does output is unspent mean in bitcoin

Hello there! In the early Bitcoin days, this concept was considered pivotal. So much so that if you did not understand UTXOs correctly, you could have made a transaction you never intended to in the first place. Difficult to grasp? Stay with me. You always need a UTXO or an unspent transaction output to make a transaction. This mainly happens due to the protocol rules which Satoshi Nakamoto had defined in Bitcoin to prevent double spending. Also, there is no way in the bitcoin world to spend partial amounts while completing a transaction.

Instead, you need to spend whole 3 BTC out of which you will designate 0. This is called sending the change to the change address. You might be wondering that you never make two transactions in your wallet when you pay someone. For more clarity, see the transaction above series which is probably done by the same person.

If you observe closely, in transactions 1 through 4, the user is sending 0. In all the 4 transactions, the remaining balance after the deduction of 0. These change addresses are nowadays generated automatically by HD wallets , much to your relief. And from these change addresses, in all the 4 transactions from 2 through 5, new transactions are initiated which is why they are labeled as spent outputs respectively in number 1- 4. Notice, on the right-hand side, the 5th transaction outputs for final balance and UTXOs.

Lastly, if you notice, the public address of initial balance and the final one is different. This is why many people get confused when they see that their wallet address changes every time they make a transaction.

This happens because HD wallets automatically send the change to a different change address so that you can secure your privacy. So next time you see you address changing, you know it is happening because you are receiving new UTXOs on a new change address! In earlier Bitcoin days, when there were no deterministic wallets, BTC wallets used to ask for a change address if you were not the spending the whole balance in the initiated transaction, failing which could result in your change being sent to addresses that you did not control resulting in loss of your funds.

It is safe to say that you now understand how UTXOs or the change process is managed in Bitcoin transactions! Hope you liked this article and found it interesting.

Here are a few articles that are currently popular on CoinSutra :. An international speaker and author who loves blockchain and crypto world. After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.

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what does output is unspent mean in bitcoin

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Probably the best way to explain this is to take a quick look at Bitcoin transactions. Each transaction starts with coins that bring balance to the ledger. UTXOs go through procession at a continuous pace and are responsible for the commencement and conclusion of each transaction. The confirmation of the mran leads to the removal of spent coins from the UTXO database. However, a record of those coins still exists oktput the ledger. In the early days of Bitcoin, this was a monumental concept.

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UTXO stands for the unspent output from bitcoin transactions. Each bitcoin transaction begins with coins used to balance the ledger. UTXOs are processed continuously and are responsible for beginning and ending each transaction. But a record of the spent coins still exists on the ledger. Bitcoin transactions are similar to cashier checks.

what does output is unspent mean in bitcoin

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Hello there! In the early Bitcoin days, this concept was considered pivotal. So much so that if you did not understand UTXOs correctly, you could have made a transaction you never what does output is unspent mean in bitcoin to in the first outptu. Difficult to grasp? Stay with me.

You always need a UTXO or an unspent transaction output to make a transaction. This mainly happens due to the protocol rules which Satoshi Nakamoto had defined in Bitcoin to prevent double spending.

Also, there is no way in the bitcoin world to spend partial amounts while completing a transaction. Instead, you need to spend whole 3 BTC out of which you will designate 0. This is called sending the outupt to the change address. You might be wondering that you never make two transactions in your wallet when you pay.

For more clarity, see the transaction above series which is probably done by the same person. If you observe closely, in transactions 1 through 4, the user is sending 0. In all the 4 transactions, the remaining balance after the deduction of 0. These change addresses are nowadays generated automatically by HD walletsmuch to your relief.

And from these change addresses, in all the 4 transactions from 2 through 5, new transactions are initiated which is why they are labeled as spent outputs respectively in number 1- 4. Notice, on the right-hand side, the 5th transaction outputs for final balance and UTXOs. Lastly, if click notice, the public address of initial balance and the final one is different.

This is why many people get confused when bitclin see that their wallet address changes every time they make a transaction. This happens because HD wallets automatically send the change to a different change address so that you can secure your privacy. So next time you see you address changing, meean know it is happening because you are receiving new UTXOs on a new change address!

In earlier Bitcoin days, when there were no deterministic wallets, BTC wallets used to ask for a change address if you were not the spending the whole balance in the initiated transaction, failing which could result in your change being sent to addresses that you did not control resulting in loss of your funds. It is safe to say that you now understand how UTXOs or the change process is managed what does output is unspent mean in bitcoin Bitcoin transactions!

Hope you liked this article and found it interesting. Here are a unslent articles that are currently popular on CoinSutra :. An international speaker and author who loves blockchain and crypto world.

After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.

Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Notify me of follow-up comments by email. Notify me of new posts by email. This site uses Akismet to reduce spam. Learn how your comment data is processed. Wallets Last Updated : September 6, Sharing is caring 31 Shares. Harsh Agrawal. Join us via email and social channels to get the latest updates straight to your inbox.

Related Posts. Leave a Comment Cancel Reply Your email address will not be published. Signup to our Newsletter. Let Me in. Howdy, Welcome to the popular cryptocurrency blog CoinSutra. Quick Links. Facebook Twitter Instagram Telegram. Share via. Facebook Bitdoin.

Copy Link. Copy link. Copy Copied.

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Views Read Edit View history. We respect your privacy. The two are actually pretty similar in how they operate. These change addresses are nowadays generated automatically by HD walletsmuch to your relief. A has 50 I am assuming this is its balance, which we are saying is also called unspent outputsand sends 20 to B and 30 to C. If it cannot be turned into a full encyclopedia article in the near future, consider moving it to Wiktionary. This article may be confusing or unclear to readers. Now A has zero. This is why many people get confused when they see that their wallet address changes every time they make a transaction. Cryptocurrency Technology Trading What is. So much so that if you did not understand UTXOs correctly, you could have made a transaction you never intended to in the first place. You cannot just spend the 3 BTC, but instead, you must spend everything you .

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