A transaction refers to a contract, agreement, transfer, or exchange of assets between two or more parties. The asset is typically cash or property. Likewise, a blockchain transaction is nothing but data transmission across the network of computers in a blockchain system.
Today’s blockchain networks use two types of transaction models: the UTXO model and the Account/Balance model.
The UTXO model are almost similar to cash or coins, Bitcoin and many Bitcoin derivatives such as Bitcoin Cash, Zcash, Litecoin, Dogecoin, Dash, and more are UTXO chains.
The Account/Balance model is similar to a bank account or debit card. Ethereum, EOS, Tron, and Ethereum Classic are account-based chains.
In this section, we'll explore what these two types of transaction model are, what's the difference between them and also go through their pros and cons.