Investment oldman Soc Management
How Do Miners Process Individual Transactions? Division
Illustrative Schematic of a Bitcoin Transaction
Step 2: Miners Verify the Transfer Request and add Step 3: Block Containing Bob and Alice’s
Stemi Beb wants teipay Alice 05 Bie it to the next block Transaction is Added to the Blockchain
Vv Bob Alice e Bob owns 1BTC Vv Bob wants to pay Savio baron transaction ee transaction Alice 0.5BTC | vy in which Bob was Does Bob have paid 1 BTC 0.5BTC??
Bob has 1BTC
Record Bob’s Sipe eee | Eee tee
to Alice
1) Before sending any bitcoins, Bob must hold bitcoins oa . : Bob wants to pay in his wallet from a previous transaction (or by Alice 0.65BTC solving a block to earn the mining reward).
Bob wants to pay slice S.SE0C 1) Miner B happens to be the first to solve this block Does Bob have ii and adds it to the blockchain. Miner B collects 12.5-
0.5BTC?? os y bitcoin reward.
Does Bob have 0.5BTC??
2) Bob creates a new transaction in which he pays 0.5
BUG fori BTC be.sAlices Record Bob’s 2) If Bob’s transaction is included the block, Alice
OB aueter becomes the owner of 0.5 BTC, which will register in her wallet.
Record Bob’s 0.5BTC Transfer
3) Bob broadcasts this transaction to the network for to Alice validation and inclusion in the blockchain.
= Consensus transaction validation creates a book of record for all transactions that have ever occurred. — Transactions may only occur if they are supported by evidence from previous transactions.
— To send bitcoins, an owner’s wallet uses its private key to prove ownership of the referenced bitcoins.
« Transaction processing typically take 10-20 minutes, but can take up to 18 hours if the network is congested.
Source: Investment Strategy Group. 7
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