UTXO (Unspent Transaction Output) transaction is a blockchain accounting model that tracks ownership of tokens by recording and updating individual outputs from past transactions. It works similarly to cash: you use whole coins (UTXOs) to pay and get change back.

UTXO transaction contains:

• Inputs: References to previous transaction outputs (transaction ID + output index).
• Outputs: New UTXOs with amounts and recipient addresses.
• Signatures: Cryptographic proofs authorizing the spending of inputs.

The flow of UXTO transaction includes the following:

1. Consumes one or more inputs (UTXOs you already have).
2. Creates one or more outputs (new UTXOs, some for the recipient, some as change to yourself). Each output is immutable and indivisible—you must spend the whole thing or not at all.

UTXO transactions and Travel Rule

Travel Rule is designed to ensure transparency in virtual transfers by identifying and screening both the originator and beneficiary of a transaction. However, in the case of UTXO transactions, which can involve multiple input and output wallet addresses within a single transaction, it becomes critical to accurately determine which addresses are relevant for Travel Rule compliance.

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Note

Sumsub supports UTXO transactions conducted using only the following cryptocurrency networks: Bitcoin (BTC), Bitcoin Cash (BCH), and Litecoin (LTC).

Sumsub has implemented a dedicated set of logic-driven rules that allow to identify all the transacting wallet addresses and visualise them for full transparency. These rules include:

• Travel Rule: UTXO Transaction Request. This rule populates counterparty wallet address, if it was empty, from UTXO transaction data.
• Travel Rule: UTXO Transaction. For applicable blockchains, this rule is triggered when only a blockchain hash (transaction ID) is available. It shows all the input and output addresses and sets the largest one as the counterparty wallet address.