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Problem: No BEP discussing the UTXO implementation #20

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Problem: No BEP discussing the UTXO implementation #20

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e333982
Problem: No BEP discussing the UTXO implementation
kansi Mar 14, 2018
3c83865
Problem: Description of merkle root calculation unclear
kansi Mar 14, 2018
860f344
Problem: Misspelled Merkle
kansi Apr 10, 2018
9e5d524
Update copyright waiver & shortname
ttmc Aug 28, 2018
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19 changes: 19 additions & 0 deletions utxo-info/README.md
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```
shortname: ?/UTXO-IMPL
name: A short discription of the current UTXO implementation
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description

type: informational
status: Draft
editor: Vanshdeep Singh <vanshdeep@bigchaindb.com>
```

## Description
The UTXO (unspent transaction output) of each transaction is tracked using the a merkle tree. The merkle root of this tree is used as the app hash and retuned to Tendermint during `commit`. Below is a short summary of the UTXO is calculated,
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It's not clear how all the outputs (which are like floating independent dots) are somehow connected to form a Merkle tree. Maybe draw a picture? They say pictures are worth 1000 words and in this case I think it's true.

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Maybe link to some articles about Merkle trees.

https://en.wikipedia.org/wiki/Merkle_tree

What about AVL trees, IAVL trees, and IAVL+ trees. I gather that those are supposed to be useful somehow, as an improvement. Is it the rules for adding the next leaf UTXO, where to put it?

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@ttmc I have restrained the context of this BEP to just discussing the current implementation. Also, the leaves of the UTXO merkle tree are added to the list of the existing leaves and the list is sorted after which merkle root is calculated. As explained in the BEP, the leaves are added to the utxo collection and then all the leaves are read back and sorted, after which the root is calculated.


- Each unspent output is considered as a leaf node in the merkle tree.
- The nodes are added/removed with each incoming transaction i.e. during `commit` when the transactions are being processed for bulk write the UTXO are updated in the `utxo` collection.
- Once all the transactions in a block are processed and stored, all the objects in the `utxo` collection are fetched and stored i.e. a list of leaves is prepared.
- The merkle root is calculated using this list of leaves.


## Copyright Waiver
To the extent possible under law, the person who associated CC0 with this work has waived all copyright and related or neighboring rights to this work.