The Simplest Bitcoin Book Ever Written
A BITCOIN TRANSACTION UNDER THE HOOD:
(Definitions of the terms that are *in bold* follow)
- When Ali sends those sats to Benji, the payment transaction is broadcast to the network.
- The transaction gets validated by nodes that make sure Ali really has the bitcoin to send, and that it has not previously been spent (to prevent double-spending).
- Once validated by a node, it waits in the mempool with other peoples' transactions.
- The transactions in the mempool get added in a block to the blockchain when a miner finds a nonce that satisfies the difficulty algorithm.
- Each block has a timestamp.
- This creates immutability , and helps protect the difficulty algorithm adjustment from being manipulated.
- Each block represents one confirmation for the transactions included in it.
- As blocks are added, on average every ten mins, the immutability of the blockchain increases.