How do Bitcoin transactions work?
Bitcoin transactions are transfers in Bitcoin from one person to another. Such a transfer is carried out exclusively within the blockchain of this cryptocoin. Today we will analyze what a transaction in the Bitcoin network is in more detail, revealing the secrets of how Bitcoin transfers work.
Bitcoin transaction – what is it?
A transaction in the Bitcoin network made from the sender’s wallet to the recipient’s wallet is a confirmed operation that is recorded on the network without encryption. Anyone can watch the chain by transfer, up to transactions related to receiving the very first Bitcoins, even before 2009.
Any transaction with Bitcoins is made between cryptocurrency wallets. The user or trader purchases BTC for classical money and stores it in the wallet, planning to earn on the growth of this cryptocurrency. This growth can take place both in a month and in 2-3 years, depending on the phase of the market in which the Bitcoin was bought.
How does a bitcoin transaction work
When transferring money in Bitcoins, you need to understand that in reality there is no sending. There is only a rewrite of the total number of BTC coins on users’ wallets. The amount on the balance of the one who sent will decrease by the amount of Bitcoins sent, while the amount of the recipient will increase. The system records any transaction as an input, i.e. the amount transferred from account to account or output for amounts sent.
Transferred funds are no longer available and no further actions can be taken with them. But, you can check whether the financial transaction went through or not. Transactions can be tracked. Sometimes this is useful, because occasionally, due to the setting of a low commission, the transfer of Bitcoins freezes and the money reaches it only after hours or even days.
When conducting transactions with Bitcoin, you maintain complete anonymity. Full name of wallet owners is not displayed. Any crypto address has the form of an almost random code consisting of dozens of numbers and letters. Also, the wallet address is often mutable, which excludes the possibility of linking documents of a real person to a crypto account.
Despite the complete transparency of the information stored in the blockchain, all transactions are only combinations of symbols, and without knowing the wallet address of another person, it is impossible to transfer funds to him. You can also use a secret code, which also consists of letters and numbers.
Bitcoin transaction example
Let’s analyze the transaction using a simple example, without abstruse terms. Helen transfers Bitcoins to John. In fact, the transaction will take place in 3 stages:
Input. This step will record the BTC address from which Helen previously received the Bitcoins she wants to transfer to John.
Quantity. This is the amount in Bitcoins that will be transferred as part of this transaction. Let’s say Helen sends 0.21 BTC to John. This amount will go through the transaction.
Conclusion. This is John’s private key, also known as his Bitcoin wallet address.
After sending the cryptocurrency, you can check whether the transaction has been completed or is still being processed. Services like Blockchain.info are suitable for this.
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