# Extended Unspent Transaction Output (EUTXO)

Cardano uses an innovative [Extended Unspent Transaction Output (EUTXO)](https://iohk.io/blog/posts/2021/03/11/cardanos-extended-utxo-accounting-model/) accounting model to support multi-assets and smart contracts.

Smart contracts are digital agreements, written in code, that can be executed without an intermediary once certain conditions are met. Smart contracts make non-fungible tokens (NFTs) and decentralized finance applications possible.

Building on Bitcoin’s UTXO model, the EUTXO model provides a secure and versatile environment to process multiple operations without system failures. This model offers better scalability and privacy, as well as more simplified transaction logic, as each UTXO can only be consumed once and as a whole, which makes transaction verification much simpler.

EUTXO offers unique advantages over other accounting models. The success or failure of transaction validation depends only on the transaction itself and its inputs, and not on anything else on the blockchain. As a consequence, the validity of a transaction can be checked off-chain, before the transaction is sent to the blockchain. A transaction can still fail if some other transaction concurrently consumes an input that the transaction is expecting, but if all inputs are still present, the transaction is guaranteed to succeed.


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://cardano-wiki.gitbook.io/cardano/blockchain-model/blockchain-model-contents/extended-unspent-transaction-output-eutxo.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.