Here’s how Bitcoin transactions are done
February 08, 2019
Buying Bitcoin is not as simple as you may think. Agreed, on the face of it, the whole process of buying Bitcoin looks pretty simple, but behind the scenes there is a lot going on that you may not know about. When you buy Bitcoin through an Online Bitcoin Exchange, your bitcoin wallet and network go through a series of steps to ensure that you get the right amount of money in your wallet.
A bitcoin is not a single coin as you may think. Instead, it is recorded as a transaction comprised of an input, output and an amount.
It works like this, whenever someone sends a Bitcoin to you or anyone else, the transaction is recorded as an output in your wallet with an address to the person who has been sent the Bitcoin as the transaction input. Similarly, when that person sends Bitcoin to anyone else, the transaction will be recorded as an output in the wallet and as an input to the Bitcoin address of the receiver.
With the help of this system, each Bitcoin can be traced to the time it was created and to whom it was sent when. This level of transparency is not available with any other system of currency or investment.
However, you cannot divide the amount of Bitcoin that you possess. If person A wants to sell person B half a Bitcoin he possesses, he cannot do so and will have to sell the full Bitcoin in his possession.
You can, however, slice the Bitcoins using the wallet and sell it on Cryptocurrency Exchange. The smallest unit of Bitcoin that can be made is called a ‘Satoshi’ and you can send a minimum of 5340 Satoshi’s whenever you want to make a transaction. This is over and above the Bitcoin transaction fee that you have to pay for any transaction that you do with your Bitcoin. Transacting with Bitcoin is may be complicated, but it has been proven to be the best place to grow your money.