Bitcoin Tech #1 - UTXOs with Shinobi

 
 
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“There is no such thing as a balance; Bitcoin is not a bank account… its actually a collection of UTXOs.”
— Shinobi

SHOW DESCRIPTION

Location: Remotely
Date: Tuesday 15th December
Company: Block Digest
Role: Host

Checking your balance or sending Bitcoin can be as simple as opening an app or scanning a QR code and clicking send, but what is happening behind the scenes to make that happen?

Unspent transaction outputs (UTXOs) are the monetary units of bitcoin. They are likes coins and notes in the traditional financial system but can be of any value. 

When accessing a wallet, the software creates your balance by totalling the value of all your UTXOs, and when you want to send someone Bitcoin, your wallet selects the UTXOs required to make up the amount you want to send. 

In many cases, wallet software abstracts away UTXOs so that the user does not have to consider them. However, it is a crucial part of the system that, when properly used, can help protect your privacy and reduce your transaction fees. 

In this interview, I talk to Shinobi, the host of Block Digest. We discuss UTXOs, what they do, how they work and the implications for both privacy and transaction fees.

TIMESTAMPS

00:04:57: Introductions
00:07:34: What is a UTXO?
00:09:38: How bank accounts and cash work
00:15:15: The gold analogy
00:15:46: Inputs and outputs
00:18:15: Fees
00:20:44: Taxes
00:23:34: Which wallets for coin selection and labelling options
00:32:28: Privacy
00:39:27: Peeling chains
00:43:00: Lightning Network
00:46:48: More on fees
00:51:46: How fees are calculated
01:00:21: Private and public keys; single and multisig
01:10:26: Final comments

 

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SHOW NOTES

PodcastPeter McCormack