In another thread UTXO (used by Ergo) and the accounting model (used by Ethereum) were compared.
UTXO based blockchains are not an accounting system, they are more like a way to move tokens around in a deterministic fashion, based on cryptographically secured permissions and group consensus about executing the rules. The system consists of these atomic elements, UTXO’s, and runs their logic for their interactions at that level, regardless of what is happening to others. Extending that model allows the movements to be more articulate, but doesn’t change the dynamic. The rules for creating the next block, avoiding double spending, and executing transactions is all just a matter of moving chips.
The global state issue with Ethereum, is that to compute the next block and achieve consensus, all transactions must be checked against each other, and simultaneously satisfy the hunger of the miners for transaction fees. It’s like Vitalik thought Bitcoin was just a calculator, and he wanted a PlayStation instead. As the number of transactions increases with the complexity of competing smart contracts, it will often happen that transactions will get bogged down or outright fail.
There was a popular notion among the ethereum community that Cardano smart contracts would not allow for concurrency, due to this lack of global state. After all, how can you simultaneously support interconnected smart contracts that touch so many accounts without having the entire thing worked out in advance before agreeing on the next block? The answer is to just use a lot of UTXO’s all of which are controlled by you on your own accounting system, rather than trying to let the blockchain be an accounting system.