Transaction

1 min read

Pronunciation

[tran-zak-shuhn]

Analogy

Think of a transaction like an entry in a checkbook. Each entry records a movement of funds from one account to another, is signed by the sender for verification, and once recorded in ink (added to the ), becomes part of the permanent financial history.

Definition

A record of a transfer of value or data between addresses on a network. Transactions are the fundamental units of activity that change the of the .

Key Points Intro

Transactions form the basic building blocks of all activity and changes.

Key Points

Includes sender address, recipient address, amount, and digital signature.

Must be validated by network nodes to ensure legitimacy.

Grouped into blocks that get added to the blockchain when confirmed.

Generally cannot be canceled or reversed once confirmed.

Example

When you send 0.1 to a friend, you create a transaction specifying the recipient's and the amount. Your signs this with your , broadcasts it to the network, and include it in a , permanently recording the transfer.

Technical Deep Dive

transactions vary by design across networks. uses a (Unspent Transaction Output) model where each transaction consumes previous transaction outputs and creates new ones, similar to breaking a bill and getting change. uses an account-based model tracking balances directly, similar to a bank account. Both models require digital signatures created with the sender's to authorize funds movement, and both may include additional data like , script code, or interactions depending on the 's capabilities.

Security Warning

Always double-check recipient addresses before confirming transactions—blockchain transactions are generally irreversible, and funds sent to incorrect addresses cannot be recovered.

Caveat

Transaction processing speed, cost, and vary significantly between different networks, reflecting their different design priorities and technical architectures.

Related Terms

Blockchain & Cryptocurrency Glossary

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