Unspent Transaction Output UTXO

UTXO stands for Unspent Transaction Output. Essentially, you can think of it as BTC particles received in a wallet as a result of different transactions. Let's explain this with an example.

Let's assume the BTC amounts in the wallets of Elon, Bill, Jeff, and sezAI are as follows:

Elon: 10 BTC

Bill: 10 BTC

Jeff: 10 BTC

sezAI: 5 BTC

sezAI decides to buy a car from Mark for 12 BTC. However, since sezAI doesn't have enough BTC, he asks his friends for a loan, and each sends 3 BTC to sezAI. As a result of this transaction, sezAI's wallet will change as follows:

UTXO1 (Existing BTC): 5 BTC

UTXO2 (From Elon): 3 BTC

UTXO3 (From Bill): 3 BTC

UTXO4 (From Jeff): 3 BTC

In short, sezAI's wallet will have a total of 14 BTC with 4 UTXOs.

When sezAI sends 12 BTC to Mark for the payment, he uses these 4 UTXOs. Since the payment is 12 BTC, there should be 2 BTC left in the wallet. On the blockchain, this transaction happens as follows: The 4 UTXOs totaling 14 BTC are destroyed, and two new UTXOs of 12 BTC and 2 BTC are created. The 12 BTC UTXO goes to Mark's wallet, and the 2 BTC UTXO goes back to sezAI's wallet. The destroyed UTXOs here form the CDD data. Let's denote the number of days between the initial entry of sezAI's existing 5 BTC UTXO1 and the date it was sent to Mark as A. The number of days between the entry of UTXO2, UTXO3, and UTXO4 (sent by Elon, Bill, and Jeff) into sezAI's wallet and the date they were sent out of sezAI's wallet are denoted as B, C, and D respectively, with each UTXO containing 3 BTC. The CDD value for this transaction is calculated as follows:

TX CDD = (5xA) + (3xB) + (3xC) + (3xD)

We can provide a more complex example.

Let's say the company CDDStamp has four wallets, each with 1 UTXO, and their balances are as follows:

Wallet1: 15 BTC (1 UTXO) (20 Days)

Wallet2: 20 BTC (1 UTXO) (30 Days)

Wallet3: 25 BTC (1 UTXO) (40 Days)

Wallet4: 2 BTC (1 UTXO)

Suppose CDDStamp will send 50 BTC to the company Assetwise for an investment. As long as you have control over all wallets, you can process all of them in a single transaction and send them to the target wallets. In our example, we can transfer 50 of the 60 BTC from our first three wallets to Assetwise's wallet, with the remaining 10 BTC going to our own Wallet4. As a result of the transaction, the UTXOs in the first three wallets are destroyed, and two new UTXOs of 50 BTC and 10 BTC are created, with the 50 BTC UTXO entering Assetwise's wallet and the 10 BTC UTXO entering Wallet4. The final state is as follows:

Wallet1: 0 BTC (0 UTXO)

Wallet2: 0 BTC (0 UTXO)

Wallet3: 0 BTC (0 UTXO)

Wallet4: 12 BTC (2 UTXO)

Assetwise: 50 BTC (1 UTXO)

The CDD data resulting from this transaction is calculated as follows:

TX CDD = (15x20) + (20x30) + (25x40) = 1900