Certified Bitcoin Professional Practice Exam

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Study for the Certified Bitcoin Professional Exam. Enhance your blockchain knowledge with flashcards and multiple-choice questions. Each question includes hints and explanations. Prepare for your certification!

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What aspect of Bitcoin transactions does UTXO relate to?

Finished transactions only
Pending transactions only
All coins currently held at an address
Transactions that have failed to complete

The correct answer is: All coins currently held at an address

The answer is centered on the concept of Unspent Transaction Outputs, or UTXOs, which are fundamental to how Bitcoin transactions operate. UTXOs represent the readable portions of the Bitcoin ledger and are linked to specific addresses, indicating the amounts of Bitcoin that can be spent. This means that UTXOs are not just historical transactions; they reflect the current state of Bitcoin that can be utilized by a specific address. In essence, UTXOs are the outputs of previous transactions that have not yet been used in new transactions and are thus still available for spending. If we think of Bitcoin as a collection of coins, UTXOs show all the distinct pieces of Bitcoin that remain unspent directly associated with an address, making them essential for understanding how many coins an address can currently utilize. This visibility into unspent outputs allows wallet software to calculate how much Bitcoin a user can transact at any given moment. The other aspects relating to finished transactions, pending transactions, or transactions that have failed to complete do not accurately capture the essence of UTXOs, which specifically concern the unspent outputs still available for future transactions rather than focusing on their status or history.