How is the association between an address and its balance implemented?

Question

Namely, could somebody shed some light on how the following things are implemented? What are the cornerstones of the implementation?

1) A piece of software (e.g., a wallet) finds out what the current balance of a particular address is.

2) A piece of software (e.g., a wallet) sends some amount of tokens from address A to address B, which results in this amount being subtracted from balance A and added to balance B.

Answer 1

The theory

IOTA uses the UTXO model to represent transactions. It means that the balance of a given address is defined as:

balance of address ADR = (sum of all "inputs" to ADR) - (sum of all "outputs" tx from ADR)

In practice, IOTA network make snapshots. After a snapshot: transaction history is lost (or at least the fullnode don't need to keep it in it's database). Instead of the full history: the balance of every address at snapshot time is the new starting point. Every address with non-zero balance is then seen as a genesis address. Therefore the balance of an address is :

balance of address ADR = 
      (initial amount on ADR at snapshot time) 
    + (sum of all "inputs" to ADR) 
    - (sum of all "outputs" tx from ADR)

The implementation

Be sure to understand that a snapshot (from a coding perspective) is as simple as a huge Map (i.e. a set of key-value pairs) where keys are the addresses, and values are the amount of iota on the address.

Implementation details can be found in code but, as far as I understand, the idea is to update the snapshot (locally on the full node) by applying all transactions approved by a milestone every time a milestone is received.

So getting the balance of an address is as simple as looking into the updated snapshot

(of course this is done on a fullnode, the light-wallet simply use the GetBalances API to request this data)

Answer 2

Current Balance of an Address

1) Get all the transaction that is addressed to Address A (confirmed) and add them up.

2) For example Address A (Bob's wallet) has two deposit 10 iota and 20 iota. Send 5 iota to address B (Alice wallet).

The Transaction Bundle should look like this

1. Withdraw 10 Iota from Address A, Withdraw 20 Iota from Address A
2. Sent/Deposit 5 Iota to Address B (Alice's wallet)
3. Send 0 Iota to Address A.
4. Send 15 Iota to Address X (this is a new address that belongs to Bob's wallet).