The core challenge in the world of cryptocurrency has always been how to strike a balance between scalability and decentralization. Many projects, in the pursuit of high throughput, often sacrifice a portion of decentralization, and vice versa. Achieving excellent scalability and decentralized security requires returning to the most fundamental unit: the account model that represents the interests of each token holder.
Ideal scalability should not be based on linear processing of a single account but rather on a finer-grained “minimal scalable concurrency unit.”
Bitcoin’s UTXO model is an outstanding example of this concept. UTXO, or Unspent Transaction Output, can be understood as the “banknotes” or “coins” of digital cash. Each UTXO is an independent, parallel-processable unit. When a transaction occurs, it spends existing UTXOs and creates new ones. This model allows different transactions to process different UTXOs in parallel, thereby achieving a high degree of concurrency. It enables Bitcoin to avoid the locking of a single account state typical in traditional account models, thus improving the network’s overall processing capacity.
In contrast, public chains like Ethereum, which are based on the account model, have global account states. When a transaction occurs on an account, that account must be locked to avoid conflicts, limiting internal concurrency. Although these chains strive to improve throughput via technologies like sharding, in terms of concurrency at the account level, the UTXO model holds a clear advantage. Sui’s Object model draws inspiration from Bitcoin’s logic of concurrency, attempting to break down states into independently operable “objects,” which is an exploration in the direction of the “minimal scalable concurrency unit.”
There are doubts about the decentralization of the PoS (Proof of Stake) consensus mechanism, which is compared with the decentralized roots of Bitcoin—UTXO.
In the PoS consensus, token holders usually need to stake tokens to validator nodes, thereby delegating their “security rights” to these nodes. This delegation model introduces centralization risk, as validator decisions may not align with the interests of the token holders they represent. For example, a small number of large validators may hold most of the consensus power in the network, introducing risks of censorship or collusion. The level of decentralization in PoS differs from Bitcoin because Bitcoin’s decentralization originates from each token holder’s self-delegation through the UTXO model. In Bitcoin, each UTXO is directly controlled by its holder through private keys, with no delegation of security rights to any third party.
This logic extends to the DeFi domain as well. The security of DeFi projects is often delegated to project developers or a few governors. Liquidity Providers (LPs) deposit assets into DeFi protocols, essentially delegating asset security to smart contract developers and protocol governors. If the project acts maliciously, if there are vulnerabilities in the smart contracts, or if governance is abused, token holders’ interests may be harmed. This is analogous to the risk in PoS systems where validator nodes may act against the interests of those who delegated their votes.
To build a product that truly possesses both good scalability and decentralized security, its core lies in:
Based on these two points, among existing blockchain projects, Bitcoin conforms to these “account model” design principles. Bitcoin’s UTXO model not only provides high concurrency but also ensures that token holders themselves are the sole agents of their asset security through non-delegated asset control. Bitcoin’s PoW consensus and longest-chain rule are designed to solve the double-spending problem, rather than decentralization per se—the latter is more deeply rooted in its UTXO account model.
