In the field of cryptocurrency trading, an Unspent Transaction Output (UTXO) pertains to the abstraction of electronic money. What each UTXO represents is a chain of ownership that is released and enacted as a chain of Digital Signatures. Here, the owner signs a transaction that transfers ownership of their UTXO to the recipient’s Public key.

A set, in the context of a blockchain, refers to the total number of UTXOs that are present in it. In this, each transaction consumes elements from said set and allows for the creation of brand new ones that are added to the set as well. The set then becomes a representation of all the coins within the system.