Know All About the Working of Bitcoin Transactions
Whether you are a new investor or an experienced investor, whenever you send bitcoin in bitcoin network, the curiosity to understand the transaction process encircles you.
Though you can start investing in bitcoins without considering the technical aspect but, we suggest you to equip yourself with all necessary knowledge before diving in the bitcoin landscape to ensure your trust in the digital token.
The transaction process is the basic infrastructure of bitcoin, which differentiate it with the traditional method of transaction. Moreover, transaction process of bitcoin is not that simple as it seems, in fact, the secured, streamline process is the result of a collaboration of the diverse range of complexities including cryptography, data structure and temper less scripting. Along with it, the process does not allow you to instantly transfer bitcoin. Moreover, the digital wallets and the bitcoin networks process simultaneously to ensure that your certain amount of money is transferred to the particular node.
Bitcoin transaction, unlike traditional currency, does not hold the value of the single coin instead, the bitcoins are registered as transaction and has 3 major pieces input transaction, output transaction and amount. To understand them better let’s discuss them one by one.
Transaction Input holds the address of the node from where the transaction is initiated or the bitcoin is sent.
Transaction Output holds the address, to which bitcoin is sent. However, if you hold bitcoin wallets to store currency, then it will be the address for bitcoin transaction.
Amount constitutes the number of bitcoin that was sent during the bitcoin transaction.
Hence, when someone sends you the bitcoin, the address they send bitcoin from i.e. their bitcoin wallet address will be the transaction input while your address i.e. the address they send bitcoin to, will be the transaction output. Both of them will be stored on bitcoin Blockchain accordingly.
Now when you send this bitcoin to any other address, then bitcoin Blockchain will store your address as transaction input and vice versa.
Using this system people can trace and monitor the entire journey of bitcoin from when it is created to where it is transferred ensuring transparency of the system.
Now let us consider we want to send only half the value of bitcoin which seems a problem as the amount is attached with transaction input and output is not divisible.
However, in such case, we send whole bitcoin and the bitcoin network will automatically break it and send the remaining amount of bitcoin back to the third address in our control as transaction output. This indicates, the forthcoming challenge of bitcoin generating multiple addresses. Such as South Africa bitcoin exchange platform are ready to assist you in understanding everything you need to know on bitcoin trading in South Africa.