Outpoint

Outpoint, in the context of blockchain technology, specifically within the Bitcoin protocol and similar cryptocurrencies, refers to the specific output of a previous transaction that is being referenced as an input in a new transaction. It essentially "points out" which UTXO (Unspent Transaction Output) is being spent.

An outpoint is a unique identifier composed of two parts:

• Transaction Hash (txid): A unique cryptographic hash that identifies the transaction containing the UTXO that is being spent. This is usually a 256-bit hash.

• Output Index (vout): An integer that indicates which specific output from that transaction is being spent. A single transaction can have multiple outputs, each with its own index starting at 0.

Together, the transaction hash and output index uniquely identify the UTXO being consumed as an input in the new transaction. When a transaction is created to send cryptocurrency, it must reference existing UTXOs as inputs, and each of those references is an outpoint. This mechanism ensures that only the rightful owner of a UTXO can spend it by providing the correct outpoint and a valid digital signature.

When a transaction is confirmed and added to the blockchain, the UTXOs referenced by its inputs (the outpoints) are considered spent and no longer available for future transactions. The transaction creates new UTXOs as outputs, which can then be referenced by outpoints in subsequent transactions, continuing the cycle.