Utxo model

Bitcoin has no accounts or balances at the protocol level. Value lives in discrete unspent transaction outputs (UTXOs). A transaction consumes whole UTXOs as inputs and creates new UTXOs as outputs; if you spend from a 1 BTC UTXO to pay 0.3 BTC, you send 0.3 to the payee and route the remainder back to yourself as a change output. A wallet "balance" is a wallet-software summation over UTXOs its keys control — the chain itself stores no such number.

Nuance: The UTXO model is why coin selection, change addresses, and "UTXO consolidation" exist, and why on-chain privacy analysis focuses on linking outputs. It contrasts with account-based ledgers (e.g., Ethereum) where the protocol tracks balances per address.

Common misstatements:

• "My bitcoin is stored at my address." — Addresses are spending conditions on UTXOs; the coins are chain entries, and one wallet typically controls many UTXOs across many addresses.
• "You can send part of a UTXO." — Inputs are consumed in full; partial spends are implemented via change outputs.
• "Bitcoin tracks account balances." — No; balance is a client-side aggregation.