“Add up the complete UTXO set to calculate Bitcoin’s total supply.”
“The UTXO model can be attributed to Hal Finney’s Reusable Proofs of Work proposal.”
Definition(s) from the Web
The UTXO set is the collection of all addresses with unspent outputs. Source
The total UTXOs present in a blockchain represent a set, every transaction consumes elements from this set and creates new ones that are added to the set. Thus, the set represents all of the coins in a particular cryptocurrency system. The complete UTXO set can be summed to calculate the total supply of a cryptocurrency at a given point in time.
Outputs are a superset of UTXOs. Accordingly, UTXOs are a subset of the outputs superset. Bitcoin UTXO lifespans have been studied. In the case of a valid blockchain transaction, unspent outputs (and only unspent outputs) may be used to fund further transactions. The requirement that only unspent outputs may be used in further transactions is necessary to prevent double-spending and fraud.
For this reason, inputs on a blockchain are removed from the UTXO set when a transaction occurs, whilst at the same time, outputs create new UTXOs, which are added to the UTXO set. These unspent transaction outputs may be used (by the holders of private keys; for example, persons with cryptocurrency wallets) for the purpose of future transactions.
The UTXO model can be attributed to Hal Finney’s Reusable Proofs of Work proposal, which itself is based on Adam Back’s 1997 Hashcash proposal. Source