Homework on UTXO vs Account Model

The account model doesn’t require much space as the UTXO model, why is that a benefit?

Tx taking less space, means more tx, faster tx and more cheaper tx fee.

How is the account model not as great as the UTXO model for privacy?

It is so much easier to follow the transaction using the account model because it goes from one account to other account.

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Homework on UTXO vs Account Model - Questions

  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?

Each transaction updates the accounts on Ethereum rather than having inputs and outputs. The transactions take less space up in the block compared to the UTXOs in Bitcoin.

  1. How is the account model not as great as the UTXO model for privacy?

The account model is not as great as the UTXO model for privacy because you can see exactly how much moneyy has been sent and to which address. In ethereum you cannot send both to yourself and another person whereas in bitcoin you can.

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  1. can add other stuff on top and have more transactions.
  2. You know the exact amount of funds that leave your wallet and to which wallet
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  1. The account model that Ethereum uses doesn’t require as much space as the UTXO model of Bitcoin. Taking up less space is pretty much always a positive. For example, it future proofs Ethereum’s potential global adoption. Suppose that Bitcoin did not introduce Segwit. Then all the space that the bitcoin blockchain would take up would probably hold back bitcoin from being a leading cryptocurrency in the crypto space.

  2. The account model is simpler than the UTXO model in that the code acts like our traditional financial system e.g. move $X from account A to account B. However you cannot send transactions to yourself like with Bitcoin. Of course if you have multiple accounts you can send funds between them, but with Bitcoin you could send a transaction and send some change back to yourself all in one go. Another property Ethereum has, unlike Bitcoin, is fungibility.

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  1. The account model has smart contract that only show balances
    whereas UTXO model has the whole blockchain
    2, In the account model one can see the balances so not very private.
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  1. It’s simpler and requires less code to achieve a transaction.
  2. An etherium transaction doesn’t have inputs and outputs so you can see exactly how much has gone to an address whereas in bitcoin multiple outputs mean you’re unable to know how much has gone to each address.
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  1. It’s faster.
  2. It’s clear who sent what to whom, no possibility of simultaneous transactions to yourself and another…
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  1. more usebul space in every block so more transaxtions can fit

  2. not so good for privesy reasons

1.)
Small Etherium transactions = less space is needed (in bytes) on the blockchain.

(At least in direct comparison to bitcoin)

  • Less full blocks
  • lower fees
  • faster Tx conformations

2.)
You cannot create multiple outputs with just one transaction.
Therefore, someone who knows my public address can easily check my account balance

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  1. Because it saves block space, and makes everything run faster and smoother.
  2. Because with the UTXO model you can’t know where what transaction is going, you can’t even know if the sender sent money to himself.
    With the account model you can see who sent what transaction and who received it.
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1.The account model doesn’t require much space as the UTXO model, why is that a benefit?

Smaller data amounts, so more transactions can be done in one block, more efficient, quicker processing.

  1. How is the account model not as great as the UTXO model for privacy?

You can see and follow every transaction. You can see who has sent it and who has received it. You cannot have. Because it is taking from an account balance, it is the equivalent of one input and one output for a transaction. The UTXO model can have multiple inputs and outputs on the same transaction.

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  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?

Every transaction in the account model only needs to make one reference and signature that produces one output, offering simplicity (similar to traditional finance model of transactions) and more fungibility, as transactions are easier to track. This offers more space on blocks for more complex transactions, as the more operations a transaction executes, the more it will cost in gas.

  1. How is the account model not as great as the UTXO model for privacy?

Aside from scalability issues, in the account model, the sender’s and receiver’s transactions and balances are clearly visible, and though more fungible, it offers no privacy, whereas each utxo requires more work tracking ownership of each output, offering some degree of potential “privacy”.

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  1. UTXO model maintains complete traceability of each coin which could identify coins as tainted by past transactions. Account model disconnects history of each token from the token maintaining fungibility.
  2. I think it is actually the opposite: privacy is better maintained by account model than UTXO model as coin history traceability is lost with account model.
  1. Less space in transactions make it more accessible by participants, it increases the scalability of the blockchain, and generally increases the storage capacity.
  2. The Account model always shows how much was sent and the address where it was sent to. However with the UTXO model you can obscure that information by breaking it apart and potentially giving yourself change.
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Hello sir, could you explain a little bit more why is not so good? or which are those privacy reason?

If you have any more questions, please let us know so we can help you! :slight_smile:

Carlos Z.

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Not quite right sir, The Account Model is quite easy to track the provenance of a wallet/account, since you can track “from, to, quantity, hash, time” on the blockchain in a way more simple than UTXO.

While the UTXO models made harder to track the provenance of the funds, there are still procedures to keep track of the funds provenance of a wallet (since the blockchain is public, there will always be a way to track any wallet funds).

Even the fact of sending funds back to yourself, means an output with a input, so you can send 1 BTC (1 input) divided for 8 persons, 0.1 BTC per person = 0.8 BTC for persons (8 outputs). The rest 0.2 BTC will be automatically sent to another address that you control from your private keys, so it counts has another output. Inputs must be spent completely, there is no way to spent like 80% of an input (0.8 BTC), this is why if you spend that 80% to persons, the 20% goes back to yourself in another address (create a new input with the rest of the funds 0.2 BTC).

From the human perspective, is quite hard to follow the track of 1 input with 9 outputs. This is when some kind of privacy comes from, since 1/9 output is yourself and 8/9 are the persons. How can you track from the outside which belongs to who?

Hope this gives you a clear view of the subject, keep learning! :

If you have any doubt, please let us know so we can help you!

Carlos Z.

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  1. This means that there is less data stored on the blockchain making it easier for more nodes to participate as the blockchain is easier to decipher and update.
  2. The account model makes it easy to trach which address is receiving the funds in contrast to btc where the utxo model can pay out several accounts
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  1. The account model frees up space, allowing for a faster network and lowers the barrier of entry for ethereum miners to mine ETH.

  2. The account model makes transactions easier to follow because the coins are moving from one account to another, you don’t necessarily send money back to yourself, and it’s easier to trace than UTXOs.

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  1. Etherium network uses an account model eliminating the UXTO requirements which intern used less space not having to compute and store the extra data within the blockchain.

  2. The account model is easy to track the transaction, as it is only transmitted between the two parties accounts, where as Bitcions are fully traceable back to it’s originator. Etherium coins are not, making them fungible.

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  1. The account model doesn’t require much space as the UTXO model, why is that a benefit?

The TX takes up less space on the Blockchain, allowing more TX to be included in each block.

  1. How is the account model not as great as the UTXO model for privacy?

Less private because the TX is only from A to B, easy to track. UTXO can be spent to multiple accounts making it harder to track and know which address is the same as the senders.

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