BitcoinExplained#4 :

Transactions - Moving Bitcoin on the Network

A Bitcoin transaction is like writing a digital check. You specify the recipient and amount, then sign it with your private key to prove you authorize the transfer.

How transactions work :

- You "spend" previous UTXOs (unspent transaction outputs) as inputs

- Create new outputs specifying where Bitcoin goes (recipient addresses)

- Sign the transaction with your private key to prove ownership

- Broadcast the signed transaction to the Bitcoin network

- Miners validate and include it in a block

Real-world analogy :

Imagine writing a check. You specify who gets paid and how much, then sign it to authorize the payment. Your bank verifies your signature matches their records before processing. Bitcoin works similarly, but instead of a bank, thousands of computers verify your digital signature.

Key components :

- Inputs : The Bitcoin you're spending (from previous transactions)

- Outputs : Where the Bitcoin is going (recipient addresses)

- Digital signature : Proof you own the private key for the inputs

- Transaction fee : Payment to miners for processing

Why signatures matter :

Your digital signature proves you control the private key without revealing it. It's mathematically impossible to forge, making Bitcoin transactions extremely secure.

Once confirmed :

Transactions become permanent and irreversible, there's no "undo" button in Bitcoin.

Bottom line :

Transactions are how you actually move Bitcoin using cryptographic proofs instead of trusted intermediaries.

#Bitcoin #BitcoinExplained #Transactions #DigitalSignatures #BitcoinBasics