Post
Topic
Board Beginners & Help
Re: "How are Bitcoin transactions done?"
by
Mastercon
on 11/06/2025, 07:19:58 UTC
Bitcoin is the protocol and payments network that transacts bitcoin.

A public ledger records all bitcoin transactions and copies are held on servers around the world. Anyone with a spare computer can set up one of these servers, known as a node. Consensus on who owns which coins is reached cryptographically across these nodes rather than relying on a central source of trust like a bank.

Every transaction is publicly broadcast to the network and shared from node to node. Every ten minutes or so these transactions are collected together by miners into a group called a block and added permanently to the blockchain. This is the definitive account book of bitcoin.
A bitcoin transaction is a set of inputs and outputs. Each time you receive bitcoin you create one or more inputs. Each time you send you create one or more outputs by combining your inputs.  Kind of like when you combine or break up bills and receive change at the till. This creates a tree of inputs and outputs and their relationships all the way back to all the transactionally related coins initial creation when they were mined.

Bitcoin operates on a fee market, and not being centralised like your "other cyrptocurrencies" every user ends up verifying all data yo ever have passed through Bitcoin. So we keep the amount that can pass through Bitcoin, it's bandwidth if you will, small enough to maintain our decentralisation so anyone can see and verify Bitcoin. You can make them go through by increasing their fees, the most common method to do so being a feature called RBF.