A Deeper Look into Transactions
In the realm of blockchain and Bitcoin, transactions are the lifeblood that enables the movement of digital currency between participants, so it's time to explore the intricacies of blockchain transactions.
Transaction Structure
Once again, a Bitcoin transaction is a digital message that specifies how bitcoins are "moved" (they aren't actually, their ownership changes) from one address to another. At its core, a transaction contains the following components:
| Component | Description |
|---|---|
| Inputs | Inputs are references to previous transactions that prove the sender has the bitcoins they wish to spend. Each input specifies which previous transaction's output is being used as an input for the current transaction, effectively linking transactions together in a chain of ownership. |
| Outputs | Outputs specify the recipient(s) of the bitcoins and how many bitcoins each recipient will receive. A transaction can have multiple outputs, allowing bitcoins to be split and sent to different addresses in a single transaction. |
| Amount | The quantity of bitcoins being transferred in the transaction. It's important to note that the sum of inputs must equal the sum of outputs plus any transaction fee. |
| Transaction Fee | This is not explicitly specified in the transaction but is implied as the difference between the sum of inputs and the sum of outputs. Miners collect these fees as a reward for including the transaction in a block. |
| Signatures | To authorize a transaction, the sender must provide a digital signature for each input. The signature proves that the sender owns the bitcoins being spent and has the right to transfer them. |
Let's now take a look at a real transaction (you can find it here):
As you can see, this transaction contains 7 inputs and 4 outputs, each having a unique address. However, the sums of input bitcoins and output bitcoins do not match with the input sum being greater. Remember, there are also a transaction fees which should be taken into account:
The amount is equal to the sum of output bitcoins, and amount + fees is equal to the sum of input bitcoins.
Transaction Verification
Before a transaction is added to a block and recorded on the blockchain, it must be verified by the network. This verification process ensures that the transaction is valid and conforms to the network's rules. Here are the key aspects of transaction verification:
| Aspect | Description |
|---|---|
| Signature Verification | Nodes in the network verify the digital signatures to ensure that the transaction is authorized by the owners of the input addresses. |
| Double-Spending Prevention | The network checks to ensure that the inputs have not been previously spent, preventing double-spending. |
| Conformance to Protocol Rules | The transaction must adhere to the rules of the Bitcoin protocol, such as the correct structure and not exceeding the maximum block size. |
As we have mentioned in the previous chapter, once verified, the transaction waits in the mempool until a miner selects it to be included in the next block. The block is then broadcast to the network and verified. If everything checks out, the block is added to the blockchain, and the transactions within are considered confirmed.
Additional Confirmation
Let's get back to our transaction. If you opened the link to this transaction, you may have noticed the following:
Once again, the first confirmation occurs when a transaction is included in a block. However, each subsequent block added to the blockchain that builds upon the block containing the transaction counts as an additional confirmation. More confirmations reduce the risk of a transaction being reversed.
As is with our transaction, it's common practice to wait for six confirmations before considering a Bitcoin transaction final since this depth of blocks makes it extremely unlikely for the transaction to be reversed without an enormous amount of computational power.
¿Todo estuvo claro?
Contenido del Curso
Introduction to Blockchain
3. Advanced Blockchain Concepts
Introduction to Blockchain
A Deeper Look into Transactions
In the realm of blockchain and Bitcoin, transactions are the lifeblood that enables the movement of digital currency between participants, so it's time to explore the intricacies of blockchain transactions.
Transaction Structure
Once again, a Bitcoin transaction is a digital message that specifies how bitcoins are "moved" (they aren't actually, their ownership changes) from one address to another. At its core, a transaction contains the following components:
| Component | Description |
|---|---|
| Inputs | Inputs are references to previous transactions that prove the sender has the bitcoins they wish to spend. Each input specifies which previous transaction's output is being used as an input for the current transaction, effectively linking transactions together in a chain of ownership. |
| Outputs | Outputs specify the recipient(s) of the bitcoins and how many bitcoins each recipient will receive. A transaction can have multiple outputs, allowing bitcoins to be split and sent to different addresses in a single transaction. |
| Amount | The quantity of bitcoins being transferred in the transaction. It's important to note that the sum of inputs must equal the sum of outputs plus any transaction fee. |
| Transaction Fee | This is not explicitly specified in the transaction but is implied as the difference between the sum of inputs and the sum of outputs. Miners collect these fees as a reward for including the transaction in a block. |
| Signatures | To authorize a transaction, the sender must provide a digital signature for each input. The signature proves that the sender owns the bitcoins being spent and has the right to transfer them. |
Let's now take a look at a real transaction (you can find it here):
As you can see, this transaction contains 7 inputs and 4 outputs, each having a unique address. However, the sums of input bitcoins and output bitcoins do not match with the input sum being greater. Remember, there are also a transaction fees which should be taken into account:
The amount is equal to the sum of output bitcoins, and amount + fees is equal to the sum of input bitcoins.
Transaction Verification
Before a transaction is added to a block and recorded on the blockchain, it must be verified by the network. This verification process ensures that the transaction is valid and conforms to the network's rules. Here are the key aspects of transaction verification:
| Aspect | Description |
|---|---|
| Signature Verification | Nodes in the network verify the digital signatures to ensure that the transaction is authorized by the owners of the input addresses. |
| Double-Spending Prevention | The network checks to ensure that the inputs have not been previously spent, preventing double-spending. |
| Conformance to Protocol Rules | The transaction must adhere to the rules of the Bitcoin protocol, such as the correct structure and not exceeding the maximum block size. |
As we have mentioned in the previous chapter, once verified, the transaction waits in the mempool until a miner selects it to be included in the next block. The block is then broadcast to the network and verified. If everything checks out, the block is added to the blockchain, and the transactions within are considered confirmed.
Additional Confirmation
Let's get back to our transaction. If you opened the link to this transaction, you may have noticed the following:
Once again, the first confirmation occurs when a transaction is included in a block. However, each subsequent block added to the blockchain that builds upon the block containing the transaction counts as an additional confirmation. More confirmations reduce the risk of a transaction being reversed.
As is with our transaction, it's common practice to wait for six confirmations before considering a Bitcoin transaction final since this depth of blocks makes it extremely unlikely for the transaction to be reversed without an enormous amount of computational power.
¿Todo estuvo claro?
