Most of you might know about Bitcoin and a few of you might be lucky enough to have bitcoin in your wallet.
But do you know how does that happen? Do you know how that bitcoin ends up in your wallet or the process it has to go through whenever you buy/sell/transfer your bitcoin.
Let's see...
So, the transfer of bitcoin from one wallet to another is called transaction. We will now see or learn about the end to end journey of a transaction.
Let's say Person A wants to send(transfer) 1 bitcoin to Person B.
So, first Person A gets the wallet address of Person B.
Using this information, Person A creates a new transaction for 1 bitcoin and includes a transaction fee of 0.003 bitcoins.
Now the wallet starts the transaction signing algorithm which signs his transaction using his private key. Signing is done to verify the transaction to be valid and unique.
This transaction is now broadcasted to the memory pool(place where transactions wait to be verified) within the decentralized and distributed network.
This transaction is eventually accepted by the miners. These miners group the transaction into a block, find the proof of work and assign this block a hash value.
This block is now placed onto the blockchain. As this block gains confirmation, it is accepted as a valid transaction in the network.
Once the transaction is accepted, Person B finally gets its bitcoin.
Hooray... The transaction is now complete.
I hope you got some idea how all this works.
Stay tuned for more interesting things and till then,
Happy learning... : ).