Account Model
Definition
Ethereum's approach, where each address holds a running balance incremented or decremented by transactions. Simpler to reason about but less transparent about the exact provenance of funds than the UTXO graph.
- Used by
- Ethereum
- Structure
- Address holds a running balance
- Update mechanism
- Incremented or decremented by transactions
- Contrasts with
- UTXO model used by Bitcoin
Common questions
Why is the UTXO model considered more transparent about fund provenance?+
Each UTXO transaction explicitly consumes specific prior outputs, so tracing funds means following a discrete chain of inputs and outputs, whereas an account balance mixes all prior inflows together.
Does the account model make transaction tracing impossible?+
No, all transactions are still fully recorded on-chain, but an investigator has to reconstruct the sequence of balance changes rather than follow a single labeled coin lineage.
Which other chains besides Ethereum use an account model?+
Most EVM-compatible chains, such as Binance Smart Chain and Polygon, use the same account-balance approach because they are built on Ethereum's architecture.
Related terms
- Block Confirmation
- The count of blocks added to the chain after the block containing a specific transaction. Higher confirmation counts mean greater computational cost...
- Distributed Ledger
- A transaction record replicated across many independent nodes. Each node holds a full or partial copy and validates new entries against the...
- Private (Permissioned) Blockchain
- A network where participation is restricted to known, approved nodes. Used by banks and supply chains for transaction settlement. Records are not...
- Public Blockchain
- A permissionless network where anyone can read the ledger, submit transactions, or run a node. Bitcoin and Ethereum are public. The ledger...
- UTXO (Unspent Transaction Output)
- The fundamental accounting unit of the Bitcoin protocol. Each transaction consumes previous UTXOs as inputs and creates new UTXOs as outputs. The...