Understanding How Bitcoin Transactions Really Work
bitcoin transactions don’t move coins, they update the ledger. Inputs reference previous outputs, signatures prove ownership, and miners confirm validity by embedding them in new blocks.
Capitalizations Index – B ∞/21M
bitcoin transactions don’t move coins, they update the ledger. Inputs reference previous outputs, signatures prove ownership, and miners confirm validity by embedding them in new blocks.
bitcoin public addresses are derived from public keys using hashing (SHA-256, RIPEMD-160) and encoding (Base58Check). This process secures identities and prevents direct key exposure.
Public keys are cryptographic identifiers that let others send bitcoin to you. They derive from private keys and enable secure, verifiable transactions without revealing your secret key.
bitcoin addresses use a Base58Check format where uppercase and lowercase characters represent different values. Changing letter case alters the underlying data, making the address invalid.
bitcoin addresses are case-sensitive because they use Base58Check encoding, where character case helps detect errors. Every character must match exactly, or funds may be lost or sent to an invalid address.
bitcoin wallets don’t actually store coins; they store private keys. These keys prove ownership of blockchain addresses and authorize transactions, making secure key management essential.
Offline creation of secure bitcoin wallet addresses reduces exposure to online attacks. Using air‑gapped devices and strong randomness helps protect private keys from theft.
bitcoin paper wallets store private and public keys offline, reducing online attack risks. Understanding how keys, addresses, and backups work is crucial for secure long-term storage.