A week or so ago I had written a post titled “What is Bitcoin(BTC): A beginner’s guide.” I think that it helped you guys to understand something if not a lot about bitcoin. Alright, moving forward as many if not all of you may be aware that bitcoin is a peer to peer based independent blockchain platform that allows you to send and receive money globally without any middleman business. But then many people may not be aware as to how the transactions on bitcoins network happen. Therefore, with this post, I intend to educate a lot of people as to how the transactions on bitcoins system happen.
So what I’m going to do is segregate this post into simple, intermediate and difficult levels of difficulty.
On that note, let’s begin the simple section of this post:
Let’s assume there are 2 people Y and Z. Now if Y wants to send some amount of bitcoin to Z then he/she would need to a) have the required amount of BTC in his/her wallet (obviously), b) incur a transaction fee which is mostly in the range of 15-20$ but may be more or less depending on several other factors and finally c). Either Y or Z must not have sent that particular bitcoin (because every bitcoin is unique regarding its hash) to any other person.
After this transaction is initiated by either Y or Z, then it gets published on the blockchain. Then several people known as miners solve a bunch of mathematical calculations and try to verify the transaction information between the parties involved. If they don’t find anything fishy concerning the transaction being made, then they give it the all clear. After this happens, the verified transaction gets included within a block and is linked to the previous block and becomes a part of the blockchain ( hence the name ).
Apart from this, the fascinating feature would be that no one can tamper, i.e., meddle or fiddle with the transactions that happen on the blockchain because that would mean that all the previous blocks within the platform would have to be re-written.
So, in a nutshell, that was the simple version of how transactions happen on bitcoins network.
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