A bitcoin transaction is said to be complete when coins are sent from one electronic wallet to another and is digitally signed for security. Every person in the networks knows that the transaction has happened. To know about a particular transaction, you will need to trace back to where the bitcoins were mined.
Some of the miners of Bitcoin hold to them waiting for the price to go up for trading. However, since the whole point of this currency is to spend it online to pay for products and services, it is good to know how these transactions are done. The funny thing about bitcoins is that they don’t exist anywhere. It may be said that someone has bitcoins, but when you look at their bitcoin address, you will not find any digital bitcoins held in it. The only thing that you will find is the transactions between different addresses.
Besides being able to see transactions taking place, you will also be in a position to see the balances increase and decrease. Every transaction is stored in public ledger known as block chain. For you to be able to work out the balance of any bitcoin address, you will have to reconstruct it by looking at the block chain.
Every transaction will have three pieces of information: an input, amount and output. If for example a person X is sending some bitcoins to a person Y, then the input will be a record of which bitcoin address was used to send the money to the person Y. The amount refers to the amount of bitcoins that the person X is sending to Y. The Output is the Y’s bitcoin address.
How bitcoin is sentYou only need a private key and a bitcoin address to send bitcoins. The good thing with these transactions is that you do not need mountains of paperwork and ID to set up a bitcoin address. Addresses are actually generated randomly and are simply made of sequences of numbers and letters. The private key is also made of letters and numbers but what make it different from bitcoin address is that it is kept secret.
When doing bitcoin transactions, you have to wait for sometimes for the transaction to wait. All transactions are verified by miners and sometimes you may be forced to wait until they have finished mining. That is what you should know about bitcoin transactions.