By the end of this lesson you’ll be able to follow one bitcoin payment from the moment you press send to the moment it’s confirmed, and say what each part of the network did along the way. Crypto from Zero gave you the shape of a blockchain; this lesson shows what happens inside.
Inputs, outputs and change
Your wallet shows a balance, but Bitcoin stores outputs: parcels of coin that earlier payments sent to your addresses, each one waiting to be spent. The developer documentation calls them unspent transaction outputs, or UTXOs: “Each output then waits as an Unspent Transaction Output (UTXO) until a later input spends it.”
An output is spent whole, like a banknote. Say your wallet holds two outputs, one of 0.03 bitcoin and one of 0.015, and you want to pay someone 0.04. Your wallet builds a transaction like this:
Your old outputs go in, spent in full. The person you’re paying and your change come out, and the miner takes what’s left.
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