Spending UTXOs

Spending a coinbase creates new UTXOs, and each later spend creates more. The result is a chain of UTXOs rooted at the coinbase where the coins were first created. The height of that root coinbase is called the root height, and each descendant UTXO carries it. When a UTXO’s root height falls out of the PPLNS window, the UTXO can no longer be spent. This rule limits every output to the lifetime of the proof of work behind its root coinbase.

Figure 1. Every output in a spending chain keeps the coinbase’s root height

Splitting Outputs

When a coinbase or a descendant is split into multiple outputs, each output inherits the root height from the output it spends.

Figure 2. Both outputs of a split keep the input’s root height

Merging Outputs

When multiple outputs are used as inputs to a transaction, every new output inherits the lowest root height among the outputs being spent. If a transaction spends outputs from two transactions, every new output expires when the oldest root coinbase expires.

Figure 3. A merge gives every output the oldest input’s root height

Wallets and applications that split and merge outputs must therefore choose inputs carefully, and should warn the user or ask for confirmation before merging.