Bitcoin transactions: inputs, outputs, fees, and ownership chains

Transactions are like double-entry bookkeeping records. Each has one or more inputs (where value comes from) and one or more outputs (where value goes). Inputs and outputs do not have to sum to the same amount: outputs are slightly less because of a fee paid to miners for including the transaction in a block.

Transactions move value from inputs to outputs. An input is usually an output of a previous transaction. An output assigns a new owner via a locking script (typically requiring a signature to spend).

Outputs of one transaction can become inputs of later ones, forming a chain of ownership as value moves from address to address.

Materials

• open_in_new Bitcoin transactions (part 1)