UTXO vs. Account-Based Blockchains: A Clear Comparison

UTXO and account-based models represent two fundamental approaches to tracking value on blockchains. UTXO systems like Bitcoin treat funds as discrete coin units that must be spent entirely, similar to cash transactions with change. Account-based systems like Ethereum maintain running balances that can be directly debited and credited, like bank accounts. UTXO offers better parallelization, privacy through address diversity, and inherent double-spend prevention, while account-based models provide simpler state management, better programmability for smart contracts, and easier balance tracking. Each model has distinct trade-offs in scalability, security, and privacy that make them suitable for different use cases.