Khadija Khartit is a strategy, investment and funding expert, and an educator of fintech and strategic finance in top universities. Instead, it is basically a file referred to as money hereafter with a value that registers as a transaction when you initiate a payment or receipt.
There are three elements involved in a bitcoin transaction: a transaction input, a transaction output, and an amount.
If the bitcoin is in your walletthat will be the bitcoin address under your control. How a Bitcoin Transaction Works The bitcoins that you send to someone were sent to you from someone else.
When they sent them to you, the address that how bitcoin is made sent it from was registered on the bitcoin blockchain the encrypted and unaccessible register as the transaction input, and your address—the address they sent it to—was registered on the bitcoin network as the transaction output.
That transaction will then be registered on the bitcoin network with your bitcoin address as the transaction input. Using this system, people can trace bitcoin transactions all the way back to when the bitcoin was first created, understanding who sent it to who at any point in time.
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This creates a completely transparent system in which all transactions can be checked at any time. Bitcoin Amounts and Addresses One problem with bitcoin is that the amount attached to these transactions with their inputs and outputs isn't divisible.
For example, if Alice has a bitcoin address with one bitcoin how bitcoin is made it, and she only wants to send Bob half a bitcoin, then she would have to send Bob that entire bitcoin. The bitcoin network would then automatically create 0. That third address will also be a transaction output, meaning that the address will have multiple transaction outputs.
Over time, this means that bitcoin wallets end up with lots of addresses containing varying amounts of bitcoin and change from bitcoin transactions. When you send bitcoins to someone, your wallet will try its best to piece together the necessary funds using the addresses containing the different amounts.
That leads to transactions that can have several different inputs—different addresses with different amounts used to make up the funds.
Sending Small Amounts of Bitcoin What if you want to send just a tiny amount of bitcoin? Luckily, you can slice bitcoins very thinly indeed.
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The smallest divisible part of a bitcoin is called a satoshi, and it amounts to just one millionth of one bitcoin. The smallest transaction value is satoshis, which is still pretty tiny. This is something to consider, especially when sending tiny fractions of a bitcoin.
General What is Bitcoin? Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet.
How to Send Bitcoin To send and receive bitcoins, you'll need a Bitcoin wallet. The exact process may differ per wallet, but overall it should be about the same.
It seems just about as easy as using Venmo or another money transfer app. You'll use your Bitcoin wallet to select the type of currency you want to send in this case, Bitcoinwrite in the recipient's address, enter the amount you want to send, pay any transaction fees, and then click send.