{"id":8800,"date":"2022-09-30T05:12:58","date_gmt":"2022-09-30T05:12:58","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=8800"},"modified":"2022-09-30T05:12:58","modified_gmt":"2022-09-30T05:12:58","slug":"understanding-bitcoin-transaction-flow","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/09\/30\/understanding-bitcoin-transaction-flow\/","title":{"rendered":"Understanding Bitcoin transaction flow"},"content":{"rendered":"\n<p>Before we dig into the specifics of a bitcoin transaction it is worth explaining a little bit about the logic of Bitcoin transactions, and try to draw analogies to something you should be familiar with, banking transactions.<\/p>\n\n\n\n<p>Your bank account has a running Balance, which is the aggregate of Debits and Credits, it shows you how much many you have to spend.<br><br>Debits are transactions that spend against your Balance, and Credits are transactions that increase your Balance.<\/p>\n\n\n\n<p>Bitcoin works in a similar way but with slightly different language and logic:<\/p>\n\n\n\n<ul><li><strong>Unspent Funds<\/strong>&nbsp;&#8211; These are funds are available to spend. Your Bitcoin wallet will total all unspent funds associated with addresses that it holds to create a Balance. You&#8217;ll see these described as UTXOs. Essentially transactions that have been received and not moved on.<\/li><li><strong>Spent Funds<\/strong>&nbsp;&#8211; When you make a transaction you access Unspent Funds, sending them on to a new address, at which point they become Spent.<\/li><\/ul>\n\n\n\n<p>So the Bitcoin blockchain is a record of forward movement of funds. Unspent funds associated with addresses, specific locations on the blockchain, which are Spent in order to fund a transaction which moves them somewhere else on the blockchain, That movement being facilitated by Miners.<\/p>\n\n\n\n<p>The spending of funds is described within a transaction, showing the destinations and the fees. This movement is described by Inputs and Outputs.<\/p>\n\n\n\n<ul><li><strong>Inputs<\/strong>&nbsp;&#8211; The source of the Unspent funds, which are moved in the transaction and become Spent<\/li><li><strong>Outputs<\/strong>&nbsp;&#8211; The destination of Spent funds which become Unspent at a new address.<\/li><\/ul>\n\n\n\n<p>It isn&#8217;t the most intuitive system but a Bitcoin transaction is all about the forward flow of funds. If you send BTC you need Inputs &#8211; to fund the transaction &#8211; which are themselves the end product (Output) of a previous transaction.&nbsp;<\/p>\n\n\n\n<p>Once sent the transaction is processed (minus fee) the funds are spent from the Input and become an Unspent transaction at a new address &#8211; the Output.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/app.learncrypto.com\/file-manager\/KnowledgeBaseArticle\/Use\/Understand%20Bitcoin%20Transaction1.png\" alt=\"Understand A  Bitcoin Transaction\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Before we dig into the specifics of a bitcoin transaction it is worth explaining a little bit about the logic of Bitcoin transactions, and try to draw analogies to something you should be familiar with, banking transactions. Your bank account has a running Balance, which is the aggregate of Debits and Credits, it shows you [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[417],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8800"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=8800"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8800\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=8800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=8800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=8800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}