The Extensive Guide on EUTxO, UTxO and The Accounts-based Model
Article by BlockSplained and Presented byJosh [ATM]

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UTxO vs Accounts-BasedModel;
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How UTxO is superior to the account-based model and the difference that EUTxO brings to Cardano.

In this video, we would like to provide an extensive guide on EUTxO, UTxO and The Accounts-based Model. This is an important topic that needs to be covered in detail in order to understand how each model works.

In this guide, we will be discussing the Extensive Guide on EUTxO, UTxO and The Accounts-based Model. We will be discussing how each model works, its advantages and disadvantages, as well as how to use it in practice.

If you're looking to learn more about Cardano, Ethereum, Smart Contracts and the Accounts-based Model, then this guide is for you! By the end of this guide, you will be able to understand how each model works, and how to use it in practice. So make sure to add it to your reading list, and you won’t regret it!

Let’s start with Ethereum.
The accounts-based model is the simplest model for how transactions and wallets work and interact with each other. The entire financial system works in this way, from banks to brokerage accounts.

The underlying principle is that there are typically address-defined accounts that contain a value, be it Ethereum, USD or the number of shares. Each address can receive and send whatever value it holds to another address.

Every time value is sent from one address to another; the system state is updated.

We won’t go too in-depth here as the concept is straightforward.

UTxO based model
Unannounced to most people, bitcoin was the first implementation of the UTxO model. However, this model is more complex and thus easier to explain blockchain to beginners using the accounts-based system.

The basics are:

Transactions consume unspent outputs, which produce more outputs that can then be used as inputs.

Wallets for these blockchains manage the UTxOs owned by the user. Every core node on the blockchain records the currently unspent outputs, aka the UTxO set.

When an output is used in a transaction, it becomes spent and cannot be used again.



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