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Bank balance vs UTXO model

Your bank shows one number. Bitcoin tracks discrete coins.

Bank account

One balance number
Bank holds ledger

Bitcoin UTXOs

Discrete coin outputs
You control with keys

Your bank app shows an account balance — one number the bank updates. Bitcoin has no accounts. Instead it tracks UTXOs (Unspent Transaction Outputs) — discrete "coins" with specific values that you control with keys.

Priya

So I do not "have ₹50,000 in Bitcoin" — I have specific coins?

Dadi

Close beta. Your wallet adds them up — but the network sees individual outputs.

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UTXOs as discrete coins

UTXO coins in a Bitcoin wallet like discrete notes

Wallet balance = sum of coins you can spend.

50,000 sats

200,000 sats

Sum = balance

Keys unlock spend

Think of each UTXO like a note in your purse — maybe 50,000 sats here, 200,000 sats there. Your wallet balance is simply the sum of UTXOs your keys can spend. When you "have bitcoin," you hold keys that unlock specific outputs on the network.

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Sending — inputs, outputs, change

Bitcoin transaction inputs outputs and change flow

Pick coins in. Pay recipient. Change comes back to you.

One send

InputsPick UTXOs
SignPrivate key
OutputsPay + change

To send bitcoin:

Choose inputs — UTXOs to spend (like picking notes)
Create outputs — payment to recipient
Often change returns leftover sats to a new address you control
Sign with your private key
Miners include the transaction in a block

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India analogy — UPI vs outputs

UPI bank ledger versus Bitcoin output ownership

UPI moves ledger numbers. Bitcoin moves ownership of outputs.

UPI

Bank updates balance
Trusted middle party

Bitcoin

Outputs change owner
Public ledger, no bank

UPI moves numbers between bank ledgers — your bank and theirs update balances. Bitcoin moves ownership of specific outputs on a public ledger. No bank sits in the middle. Fees depend on transaction size in bytes, not the rupee value you send.

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Keys sign spending

Private key signs Bitcoin spend authorization

No password reset. Your key proves you may spend.

To spend a UTXO, you sign with your private key — cryptographic proof that you control those coins. No bank can reverse it or reset your password. Lose the key, lose access. This is why self-custody matters — explored in Act III after you understand the concepts.

Priya

So the network does not ask my name — it checks my signature?

Dadi

Exactly beta. Keys are the permission slip — next lessons show how blocks chain those spends together.

Transactions & UTXOs

તમે શરૂ કરો તે પહેલાં

Bank balance vs UTXO model

UTXOs as discrete coins

Sending — inputs, outputs, change

India analogy — UPI vs outputs

Keys sign spending

✅ કી ટેકઅવે

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