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A bitcoin can be expressed as a sequence of digitally signed transactions, beginning with the birth of the bitcoin as a block reward. The owner of the bitcoin transfers the bitcoin to the next owner through a digital signature in the bitcoin transaction system, similar to approving bank checks in general. A recipient can check every transaction made in the past to verify the chain of ownership. However, bitcoins are not convertible like ordinary check approvals, which eliminates the risk of chargeback fraud.
Although it is possible to manage each bitcoin individually, it would be a very complicated process if any transaction required a separate transaction for each bitcoin. That is why a transaction can have multiple inputs and outputs, so that bitcoins can be separated and reunited. Ordinary transactions will either have a single input from a previous large transaction or a combination of several previous small transactions.The difference between the total amount of input and output of the transaction goes to the minors as the transaction fee.
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