bitcoin

Explain UTXOs in bitcoin to someone who doesn't understand bitcoin at all.

czechnostradamus

You need to draw lots of pictures, otherwise it will remain too abstract.

Here's my attempt. You have two UTXOs, worth 0.3 and 0.7 BTC, as notes with a strip of magic bitcoinium or something:

```
+---+   +-------+
|XXX|   |XXXXXXX|
+---+   +-------+
|   |   |       |
|0.3|   |  0.7  |
|   |   |       |
|   |   |       |
```

and if you want to pay someone 0.8 BTC, you put them together and prepare the new notes, the outputs:

```
 |   |       |
 |   |       |
 |Ɛ˙0|  ᠘˙0  |
 |   |       |
 +---+-------+
 |XXX|XXXXXXX|
 +---+-------+

 +--------+--+
|        |  |
|   .8   |.2|  <-  invalid until the transaction is processed
|        |  |
|        |  |
```

and as you sign the old notes, the strip of magic bitcoinium attaches to the new notes and redistributes itself into 0.8 and 0.2:


```
 |   |       |
 |   |       |
 |Ɛ˙0|  ᠘˙0  | <- spent
 |   |       |
 +---+-------+

 +--------+--+
 |XXXXXXXX|XX| 
 +--------+--+
|        |  |
|   .8   |.2|
|        |  |
|        |  |
```

and then you pay with the 0.8 UTXO and pocket the 0.2 one as change.
