Bitcoin utilizes the Unspent Transaction Output (UTXO) product, akin to transactions with physical cash wherever Each individual particular person Invoice would need being traced. On other hand, Ethereum employs an account model, akin to the checking account using a running equilibrium, that's much more centralized than Bitcoin.
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All transactions are recorded on line in the digital database called a blockchain that employs potent a person-way encryption to make certain stability and proof of possession.
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