A UTXO defines an output of a blockchain transaction that has not been spent, i.e. can be used as an input in a new transaction. In other words, it can be defined as the amount of digital currency remaining after a cryptocurrency transaction is executed.

It helps in preventing double spending in a simple manner without the need for scanning entire Blockchain. Bitcoin uses the UTXO model to prevent double counting and spending. UTXO is based on Hal Finney’s reusable Proofs of Work proposal, that in turn was based on Adam Back’s Hashcash proposal.