Architectural features of Bitcoin, or what's wrong with BRC-20?
While Ethereum operates on an account-based model, Bitcoin uses an Unspent Transaction Output (UTXO) model to manage transactions, where each transaction consists of data inputs and outputs. During a transaction, inputs are deleted and new outputs are created. New outputs, called UTXOs, represent unspent balance that can be used in subsequent transactions. Essentially, UTXO is the BTC remaining in the wallet after transactions are completed.
This system is extremely important for Bitcoin - it provides a reliable way to track ownership and prevents double spending of BTC. Each UTXO can only be spent once, and all nodes on the Bitcoin network verify transactions, ensuring that UTXOs are not spent twice, thereby ensuring the integrity and security of the blockchain.
