Ethereum: UTXO model vs. account/balance model

Here is an article that compares the UTXO model (an output of a transaction that has not done) that uses bitcoin with the account/balance model that uses Ethereum:

Agreement Act: As a Bitcoin Utxo model exceeds Ethereum

In recent years, conversation on scalability and usability of bitcoins has become stronger. Many experts have expressed concern that the size of their UTXO database (incredible transaction output) becomes an obstacle that hinders the network capacity to process transactions at a sufficiently high pace. However, what exactly are the UTXO bitcoin model and how compared to the most traditional account/balance of Ethereum?

Model of unlimited output transaction

The UTXO Bitcoin model works by stores all transaction inputs (ie non -subsidy outputs) into one bulk database called “UTXO SET”. Each transaction block contains more utxo for each address and then consolidated in a larger table. This allows the use of memory and computing sources more efficiently.

The UTXO model is designed to store all possible combinations of transactions that can be extracted in a given block, reducing the number of duplicate transaction outputs and minimizing storage requirements. This approach also enables faster transaction processing times, because only the necessary UTXO is stored instead of storing each option.

Account/Balance Model

The Ethereum account model is based on a hierarchical database structure where each user has an ether account (ETH) and charges several assets. Each account contains more balances for different types of assets (for example, ETH, tokens, etc.).

In this model, the UTXO set is simply another type of transaction that must be stored along with accounts and balances. If a new transaction is extracted, a new UTXO input in a database that may or may not match the existing account balance.

The account/balance model allows greater flexibility in terms of management and optimization of assets, as users can easily adjust their marching balances. However, this also represents further complexity and latency, as transactions must match the available UTXE before they are performed.

comparison and consequences

So why do experts think that the UTXO Bitcoin is an obstacle? The key reason is that its large size has exceeded demand. With more than 200,000 transactions outputs that are not existed on the block (from 2020), the network requires a huge amount of storage space to adapt all possible combinations.

On the contrary, the Ethereum account/balance model allows for more efficient management and optimization of assets, but it may not be sufficiently scalable in high traffic environments. With increasing demand, Ethereum faces challenges in the management of the highest number of transactions without introducing considerable latency or overloading of resources.

Conclusion

The UTXO used by bitcoins has proved to be highly effective in terms of scalability and usability. However, as the network continues to grow and demand increases, its large size can become an obstacle. It is essential that developers understand the compensation between the two models and consider alternative approaches that can help alleviate capacity limitations.

Since the scalability debate continues, it is necessary to recognize the strengths and weaknesses of each model and explore innovative solutions that can conclude a gap between Bitcoin Utxo access and the most traditional account model/Ethereum balance.