> For the complete documentation index, see [llms.txt](https://plutus.hpmeducation.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://plutus.hpmeducation.com/the-eutxo-model/introduction-to-the-eutxo-model/the-utxo-unspent-transaction-output-model.md). # The UTxO (Unspent Transaction Output) model To get started with Plutus and smart contracts on Cardano, it is important to understand the underlying accounting (ledger) model it uses. Before the Mary era, Cardano used Bitcoins' UTxO (Unspent Transaction Output) model. In the UTxO model, transactions **consist of a list of *****inputs*** and **a list of *****outputs***. Transaction inputs are **existing and unspent transaction outputs** that are being spent by the transaction. Each output is connected to an ***address*** and can only be spent **once**, i.e. it can only be an input to a transaction once. **Every input in a spending transaction is spent in its entirety** and following that, it is no longer an *unspent* transaction output and **cannot** be used as an input anymore. Transactions can have a different number of inputs (*n*) and outputs (*m*). For example, a transaction with one input (`n = 1`) could create one hundred outputs (`m = 100`). Every UTxO has a value (`value`), which represents a cryptocurrency value, and **a validating function attached** to it. This function serves as its *validator* (`ν`), which enforces rules to decide whether a transaction that attempts to spend it has the right to do so. The transaction provides *redeemers* (`ρ`) that are passed to the validator functions of outputs. As each UTxO is connected to an *address* with a corresponding private and public key pair, the redeemers are signatures by which the transaction is signed using the private keys. If a transaction that attempts to spend an output is signed by that output's address private key, the validation will be successful. In other words, the validation function will evaluate to true: `ν(value, ρ) = true`. A transaction with multiple inputs from different addresses needs to be signed by each of the private keys of the addresses. If the transaction is not signed by the required signature(s), it will not pass validation and will fail. The UTxO model is a great fit for a distributed ledger as it **does not require any shared global state** for its transactions. Transactions only need to know about their inputs, and multiple transactions dealing with separate inputs are independent and can be executed concurrently. However, the transaction functionalities of these simple validators are limited, hence Cardano has implemented an extension to the UTxO model that allows more expressive validators while preserving the core properties of the UTxO model, called the *EUTxO (Extended UTxO) model*. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://plutus.hpmeducation.com/the-eutxo-model/introduction-to-the-eutxo-model/the-utxo-unspent-transaction-output-model.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.