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