[seanalltogether]

One thing that never clicked with me before is that the blockchain is really just a historical ledger, its not actually referenced in real time. When you send a transaction out on the network, nobody is actually validating it against the blockchain. Instead every node is expected to process the blockchain to produce a realtime database called the UXTO which provides a fast lookup to tell you if coins can be spent or not. So the blockchain is a history or transactions, while the UXTO is a statement of all current balances.

So while the BTC blockchain is 137 GB in size, the UXTO is only 2.7 GB which easily fits in memory.

[Buttes]

And you really only need to track UXTO for your own address if you're not a full node, and that will be very small.