An Unspent Transaction Output (UTXO) refers to the unspent portions of a cryptocurrency transaction. When a transaction occurs, it creates outputs, which can be thought of as individual coins or units of value. These outputs can then be used in future transactions.Each UTXO can only be spent once. Once it has been used in a transaction, it is marked as spent and cannot be used again. Instead, new outputs are generated, which can then become UTXOs for future transactions.The UTXO model is common in cryptocurrencies like Bitcoin. It differs from account-based systems, where balances are tracked per user. In the UTXO model, each transaction is made up of several inputs (spent UTXOs) and outputs (new UTXOs). This approach enhances privacy and scalability, as the transaction history is fragmented across many UTXOs rather than consolidated into a single account balance.UTXOs are crucial for ensuring the integrity and security of transactions, as they prevent double-spending and maintain the overall ledger’s accuracy.