account model

The account model is a way of bookkeeping on a blockchain in which the ledger stores a running balance for each account, and a transaction simply subtracts from the sender's balance and adds to the receiver's. It works almost exactly like a familiar bank statement: there is one number per account, and every payment nudges those numbers up or down. Ethereum is the best-known blockchain built this way, and it is the alternative to the UTXO model that Bitcoin uses.

Because each account is a single mutable balance rather than a pile of discrete coins, transactions are simpler to write and reason about: send ten units, and the sender's number drops by ten while the receiver's rises by ten, with no leftover change to hand back. To stop someone from replaying or reordering payments, each account also carries a steadily increasing counter that numbers its transactions, so they must be processed strictly in sequence. This neat, stateful design fits naturally with smart contracts, which are themselves accounts that hold a balance and a chunk of persistent memory.

The trade-offs are the mirror image of the UTXO approach. The account model is more intuitive and more convenient for programmable applications, but updating shared balances makes transactions harder to verify fully in parallel, and it requires care to keep their ordering unambiguous. Neither model is universally better; they are two coherent answers to the same bookkeeping question, and a blockchain's choice between them shapes how its wallets, fees, and applications are built.