FAQ

Bitcoin

Does splitting Bitcoin in smaller parts not increase it's total supply?

No it does not. If you have a cake and cut it into four pieces and you proceed and then split every of the four pieces into two pieces do you have more cake or just more but smaller pieces? You then have 8 pieces which add up to one cake the total amount of cake was not increased.

What is an UTXO?

Every coin in Bitcoin is an Unspent Transaction Output (UTXO). A transaction has inputs and outputs. The outputs are what can be spent further and be used as an input for the next transaction. Every UTXO can be linked back to the point of its coinbase transaction where it was originally created. UTXOs are the individual coins in your wallet. UTXOs can be combined and broken apart into new UTXOs.

What is a change output?

A change output is an output that is included into a transaction which belongs to the sender of a coin. Let's say we have a UTXO that has a value of 10M and we only have to pay 1M sats to the recipient then we need to give us change back. The reason for that is that a UTXO can only be completely consumed in a transaction. So if we just gave the 1M as an output the remaining 9M would go to the miners as fee. In order to avoid this we would add another output, a change output, to the transaction which has the value of 9M (minus fees) and belongs to us the sender.

What is a coinbase transaction?

The ccoinbase transaction is...

Economics

What is fractional reserve banking?

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