What are the benefits of Cardano's eUTXO transaction model compared to Ethereum's account-based transaction model? Are there any significant differences?
There is a nice blog post bu IOG: Cardano’s Extended UTXO accounting model – built to support multi-assets and smart contracts that discusses the difference between two models.
For a more in depth comparison, I recommend the UTxO- vs account-based smart contract blockchain programming paradigms paper.
To sum UTXO up:
- A UTXO is the output of a previous transaction, which can be spent in the future
- UTXO chains have no accounts. Instead, coins are stored as a list of UTXOs, and transactions are created by consuming existing UTXOs and producing new ones in their place
- Balance is the sum of UTXOs controlled by a given address
- UTXOs resemble cash in that they use ‘change’, and are indivisible (UTXOs are used whole)
To sum up the Account/Balance model:
- This accounting model resembles how a bank operates
- Users have accounts that hold their coin balance
- It is possible to spent partial balances
- The concept of change does not apply
The EUTXO model also makes it much easier to scale. Charles talks about that in this great video -- the take-away here is that Cardano will be much easier to scale than Ethereum.
I am sure there is a lot of documentation around it. But just to scratch the surface:
- Both are not same at all.
- ETH fees is charged even for failed transactions. But in eUTXO, your fees is collected only if your transaction succeeds. This alone is huge.
- Smart contracts developed in eUTXO model are much more dependable, reliable than the account model.
- I am sure you already know that ETH only went with account model because they could not think of a way to make smart contracts work with the Bitcoin's UTXO model.
But it is a really interesting comparing both Account and UTXO. Links are there above in some other comments.