What is unfair witness knowledge and unspent transaction output? […] I am confused what they imply by UTXO
Arbitrary
Arbitrary means what you suppose it does – “the information might be something you select”. It needs to be packaged in a suitable approach and there are limits on dimension. A part of a Bitcoin transaction enter is an unlocking script, these scripts are created by the transaction creator who’s spending cash. There are numerous methods they will insert additional knowledge into scripts that don’t have any impact on script execution.
Witness Information
An enchancment to Bitcoin referred to as Segwit allowed some components of transactions to be separated (segregated) into a brand new half referred to as a transaction witness. This allowed the block dimension in Bitcoin to be elevated with out affecting older software program and ready for different enhancements. The witness knowledge can embrace scripts and people scripts can include arbitrary knowledge chosen by the transaction creator. This consists of knowledge that has no impact on the Bitcoin transaction itself, aside from rising its dimension. Some individuals use this to embed international knowledge into the Bitcoin blockchain. That is controversial.
UTXO
Bitcoin transactions have inputs and outputs, inputs are references to outputs of earlier transactions. Inputs are thus spending older outputs. An unspent transaction output is abbreviated UTXO.
These UTXOs characterize items of spendable cash, like cash. If you spend a UTXO it turns into a spent TXO and is not an unspent TXO. So each transaction successfully destroys the UTXOs in its inputs and creates new UTXOs in its outputs. The overall worth of outputs can not exceed whole worth of inputs. Bitcoin nodes maintain monitor of the set of all UTXOs in order that they cant be spent twice.
