How do UTXOs contribute to the decentralization of digital currencies?

1 answers

• Feb 18, 2022 · 3 years ago
  UTXOs are an essential component of the decentralized nature of digital currencies. They ensure that every transaction is recorded and verified by multiple participants in the network, rather than relying on a central authority. This decentralization is achieved through the use of cryptographic signatures and public-key cryptography, which allow users to prove ownership of their UTXOs without revealing their private keys. By distributing the verification process across multiple nodes in the network, UTXOs contribute to the security and integrity of digital currencies. This decentralized approach also makes it more difficult for any single entity to control or manipulate the system, enhancing the overall decentralization of digital currencies.
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