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PH Customz -> general discussion -> Can Someone Explain UTXOs Like I'm New to Bitcoin?
Post Info TOPIC: Can Someone Explain UTXOs Like I'm New to Bitcoin?
Makehaste


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Can Someone Explain UTXOs Like I'm New to Bitcoin?
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I’m trying to understand how Bitcoin transactions actually work behind the scenes. Everyone keeps mentioning "UTXOs" but I can’t wrap my head around what they are or why they matter. Can someone explain this in simple terms?



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Swimmingz


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I felt the same way until I read Paybis’ guide on unspent transaction output. Here’s the simple breakdown: UTXOs are like digital cash fragments https://paybis.com/blog/glossary/unspent-transaction-output/ . When you receive Bitcoin, you’re actually getting unused "chunks" from previous transactions (UTXOs). When you want to send Bitcoin, your wallet gathers these chunks like spare change to create new transactions. What helped me was their analogy comparing UTXOs to physical cash - you wouldn’t tear a $20 bill to pay $15; you’d use the whole bill and get $5 back. That’s exactly how UTXOs work with the "change" becoming a new UTXO in your wallet.



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PH Customz -> general discussion -> Can Someone Explain UTXOs Like I'm New to Bitcoin?


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