Bitcoin transactions are more complex than it seems, and users need to learn about the bitcoin network and its process of transactions to send and receive bitcoins. Because of the complex bitcoin transactions process, you can rarely send bitcoins. There are various steps that users need to follow and learn about the bitcoin network and bitcoin wallet to make sure to get the electronic money. After learning about bitcoin transactions, you can also learn about bitcoin trading from bitql.app
Let us move forward and learn about the bitcoin network and its process of transferring money.
Bitcoin Network
To start with the process of bitcoin, it is important to understand the bitcoin network. Bitcoin isn’t a single coin; instead, bitcoin is a computer file with value registers the transactions when any user makes a payment and generates a receipt. In a bitcoin transaction, there are three main elements involved: an amount, a transaction input, and a transaction output. The amount is the number of bitcoins; the transaction input refers to the bitcoin address or location from where the money is sent, and the transaction out refers to the address to which money is sent.
A wallet is required to store the bitcoins, and if there are bitcoins in your wallet, it means the user has control over the bitcoin address. Moving forward, we will learn the working of bitcoin transactions and will learn about its process.
Working of Bitcoin Transaction
The bitcoins that a user sends to someone are the ones that he/she has received from someone else. For the user who sent bitcoins to you, their wallet address was registered on the blockchain as transaction input. You receive bitcoin, which means your address is also registered on the bitcoin network but as the transaction output.
At the time when a user sends bitcoins to other users, the bitcoin wallets generate a transaction output, which is of the person that is sending the coins. It registers the transaction on the bitcoin network as transaction input. Whereas if you send bitcoins to another user, then your address will be registered as transaction input, and the address of that user will be registered on blockchain as transaction output. It might be confusing for a novice, so let us understand about addresses and amounts of bitcoin in brief.
Bitcoin amounts and addresses
There is one demerit of bitcoin, and that is that the amount linked with transactions isn’t divisible. It might be possible that a user wants to send bitcoins to more than one person in which there will be multiple transaction outputs. This means that bitcoin wallets may end up with multiple wallet addresses containing different amounts of bitcoin, which can change from bitcoin transactions. It means that transactions can have different inputs that include different amounts. It is not clear as there might be inputs that have different amounts, and you may end up with a change in amount.
What if a user wants to transfer a small amount of bitcoin?
Some people think that it is impossible to send a small number of bitcoins. Still, the reality is that users can slice bitcoins because bitcoin is divisible up to eight decimal points: Satoshi Nakamoto, the creator of bitcoin set that the smallest divisible part is known as Satoshi. But the fact is that users can’t send one Satoshi over the bitcoin network as it’s too tiny and might get clogged in the network. Also, users must know that bitcoin transactions often charge a transaction fee, which means users have to add a little bitcoin. If you don’t add the extra amount of bitcoin on top, then the transaction will fail.
Sending Bitcoins
In order to send and receive bitcoins, it is important to have a bitcoin wallet. The users need to follow the exact process of buying bitcoins, and the first step is to download a bitcoin wallet. The bitcoin wallets allow users to store and transfer the bitcoins. The users can choose the bitcoin wallet and type of currency that they want to send or convert and enter the bitcoin amount and pay the transaction fee to complete the transaction.
