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HomeBitcoin BusinessAN INSIGHT INTO TRANSACTIONS

AN INSIGHT INTO TRANSACTIONS

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A Bitcoin transaction works when you give someone a designated amount of BTC that you own. In order for a Bitcoin transaction to be “valid,” there has to be at least one input. However, multiple inputs are a possibility too. An input is a reference to an output from a previous transaction. It’s worth noting that each Bitcoin transaction’s input must be an unspent output from a prior transaction. In addition, every input in a Bitcoin transaction must be digitally signed, which is done using the private key associated with the Bitcoin address that initiates the BTC transfer.

When several inputs are linked to a single Bitcoin transaction, it signifies the money is coming from multiple Bitcoin wallet addresses. Any Bitcoin user has the ability to create an almost limitless number of wallet addresses, each of which can hold any quantity of Bitcoin.

When several inputs are linked to a single Bitcoin transaction, it signifies the money is coming from multiple Bitcoin wallet addresses. Any Bitcoin user has the ability to create an almost limitless number of wallet addresses, each of which can hold any quantity of Bitcoin.

Here’s an example: When you send 4 BTC to “Sarah”, 2 BTC comes from wallet address #3, 0.66 BTC comes from your secured online Bitcoin wallet address #4, and the remainder comes from online Bitcoin wallet address #6. In this example, wallet addresses #1, #2, #5, and #7 don’t actually have a Bitcoin balance. Therefore it should not be used as an input because there is no unspent output associated with these addresses.

A transaction using a bitcoin wallet app, on the other hand, can have many inputs as well as multiple outputs. Multiple outputs, as you might imagine, imply that a Bitcoin transaction was sent out to be split amongst multiple addresses. A Bitcoin transaction can be sent to another Bitcoin user in a number of ways. To begin, obtain the recipient’s Bitcoin address and send the funds using Bitcoin software on your PC or mobile device. There is an easier option for mobile users in the form of scanning a QR code provided by the receiver. Users can make QR codes using any Bitcoin program, which can include the wallet address to send payments to as well as the total amount to be paid.

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For example, suppose your wallet address has received a total of 7 Bitcoins over a period of time, and you’re giving Sarah 4 BTC. When you pay money to Sarah, the Bitcoin transaction will have one input (the unspent outputs of the Bitcoin transaction through which you received those 7 BTC) and two separate outputs. The transaction to Sarah for the full sum of 4 BTC will be the first output. The “change” transaction is the second output, and it “returns” the unspent 3 BTC to your wallet address.

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