Imagine someone sends you 5 BTC.
We already know that amount can be represented by one or more UTXOs... But now a fundamental question arises...
IF UTXOs ARE PUBLIC DATA, WHY CAN’T ANYONE SPEND THEM?
Because each output has specific conditions that must be met to use its value.
And here comes something very important: THOSE CONDITIONS ARE SET WHEN THE OUTPUT IS CREATED, NOT WHEN SOMEONE TRIES TO SPEND IT...
Let’s take it step by step.
HOW IS A UTXO LINKED TO A SPECIFIC KEY?