Transaction vs UTXO (Unspent Transaction Output)

A cryptocurrency transaction is a digital transfer of value from one address to another, recorded permanently on the blockchain. Transactions are verified by network participants through consensus mechanisms and become irreversible once confirmed, representing the fundamental operation enabling cryptocurrency functionality.

UTXO (Unspent Transaction Output) is Bitcoin's accounting model where each transaction creates discrete outputs that can be spent as inputs in future transactions, similar to physical cash where you receive specific bills as change rather than maintaining a running balance in an account.