What is a Bitcoin transaction?
A bitcoin transaction is a way of transferring value between users using bitcoin as a digital currency. A transaction consists of one or more inputs and outputs, which determine who sends and receives bitcoins, how much and under what conditions. These transactions are sent to the Bitcoin network, where they are processed and confirmed by computers involved in the maintenance and security of the network, the so-called Bitcoin miners. After the transaction is confirmed, it is written down in a block, which is part of the block chain . Blockchain is a public and irreversible record of all Bitcoin transactions ever made. Given that these transactions are public, they can be viewed on websites like [blockchain.com] or [blockexplorer.one].
Source: cointelegraph
What data does a Bitcoin transaction contain?
The Bitcoin transaction contains the following data:
- The amount of bitcoin to be sent, expressed in satoshi (the smallest unit of Bitcoin)
- Sender’s address, which is a string of 26 to 35 characters representing the sender’s public key
- Recipient address, which is a string of 26 to 35 characters representing the recipient’s public key
- Transaction fee, which is the amount of bitcoin paid to the network, i.e. the miner added by the block to the blockchain, for processing and confirming the transaction
- Digital signature, which is cryptographic proof that the sender has the right to dispose of the bitcoin it sends
- Other information, such as transaction version, creation time, number of receipts, transaction size, transaction weight, transaction ID and other technical details
Source: cointelegraph
How does a Bitcoin transaction work?
A bitcoin transaction is a data structure consisting of four parts: versions, inputs, outputs and inferences. A version is a number that indicates the format of the transaction. The entries are a list of references to previous transactions that were consumed as sources of bitcoin. Each entry contains the hash of the previous transaction, the output index in that transaction, the unlocking script, and the sequence. An unlock script is a series of instructions that prove that the sender has the right to spend bitcoins from a previous transaction. A sequence is a number that can be used to change the time of confirmation of a transaction. Exits are a list of addresses to which bitcoins are sent. Each output contains an amount of bitcoin in satoshi and a locking script. A locking script is a series of instructions that determine the conditions under which bitcoins can be spent in future transactions. A conclusion is a number that serves as proof-of-work and as an unpredictable factor that makes a transaction unique. The Bitcoin transaction is sent to the Bitcoin network, where it is processed and confirmed by computers involved in the maintenance and security of the network. These computers are called nodes and miners. Nodes are computers that receive, verify, and send transactions to other nodes. Miners are a special type of nodes that solve a cryptographic problem called a hash and create new blocks. Each block contains a header and body. The header is a set of block information, such as the version, the hash of the previous block, the hash of the Merkle tree containing all transactions in the block, the time of creation, the weight and the conclusion. The body is a set of transactions that are involved in a block. This new block is added to the end of the blockchain chain, and this process occurs every 10 minutes. For their work, miners receive a reward in the form of new bitcoins + a transaction fee paid by users to make their transaction acceptable. If you want to learn more about how bitcoin transactions work, you can read the Bitcoin whitepaper, which is the original document that presented the concept and technical details of Bitcoin.
Source: cointelegraph
How is the price determined for a Bitcoin transaction?
The price for a Bitcoin transaction is the amount of bitcoin paid to miners to process and confirm the transaction. The price is determined based on supply and demand in the market, as well as based on the size and complexity of the transaction. A transaction that has multiple inputs and outputs, or that uses more complex scripts, takes up more space in the block and therefore has a higher price. The price also changes depending on the state of the network and the number of transactions awaiting confirmation. When the network is congested, the price rises as transactions compete to enter the next block. When the network is free, the price drops because there is enough space for all transactions. The price is usually expressed in satoshi per byte (hour/w), where satoshi is the smallest unit of Bitcoin (0.00000001 BTC) and byte is a measure of transaction size. The average price for a Bitcoin transaction in the past 24 hours was about 25 hours/w. This means that a 250-byte transaction would cost about 6,250 satoshi, or about 0.0000625 BTC, or about 1.65 euros at the current exchange rate. The price may also vary depending on how quickly you want your transaction to be confirmed. If you want your transaction to be confirmed in the next block (which is created approximately every 10 minutes), you will have to pay a higher-than-average price. If you are willing to wait longer, you can pay a lower price than average.
Source: cointelegraph
Conclusion
In this blog, we explained what a Bitcoin transaction is, how it is sent, how it is confirmed and how its price is determined. Bitcoin transaction is an interesting and innovative way of transferring value through a decentralized and secure network called blockchain. We hope you found this blog useful and interesting. Thank you for reading and feel free to share your opinions and questions with us on our social networks (Twitter, Instagram).