The Ledger is Bitcoin. Bitcoin is the Ledger.

I've been reading this book. Some thoughts...

There is no Bitcoin, only UTXOs.

The term Bitcoin is an abstraction. The underlying system of Bitcoin is extremely complex, involving ledgers, cryptographic signatures, and peer-to-peer networks. For the benefit of the vast majority, however, this is correctly abstracted away:

When you own Bitcoin, what do you have?

• A wallet with a balance
• The ability to send and receive Bitcoin. [private keys]
• fractional ownership

This abstraction happens at multiple levels:

• Wallet software manages UTXOs automatically
• Simple displays of balances instead of lists of UTXOs
• QR codes for addresses to send/receive

The money in your pocket is unspent.

Unspent Transactions [UTXO] are receipts of previous transactions…recorded to the Ledger. They are known as Unspent Transactions because they represent the value of your Bitcoin holdings. Akin to the notes in your wallet.

Your private key enables you to access a certain number of UTXO’s - each assigned a value. When you say you "have Bitcoin," what you actually have are a certain number of UTXOs - recorded on the blockchain - that are spendable by the private keys you control. When you buy Bitcoin you are really buying UTXOs.

Transactions Generate UTXOs.

Assume you control 0.5 BTC. You decide to send 0.3 BTC to an address. Your Wallet uses that 0.5 BTC UTXO as an input and the transactions outputs two new UTXOs:

→0.3 BTC to the recipient →0.2 BTC back to yourself [your change]

In Bitcoin’s UTXO model - your bitcoin "balance" is actually the sum total of all UTXOs that your private keys control. Spend it all and you’ll have zero UTXOs.

UTXO Image