How Bitcoin Works

Create and sign

A wallet selects spendable transaction outputs, names new destinations and signs the spend with the required keys. The signature authorizes the transaction without revealing the private key.

Broadcast and validate

Peers relay valid transactions. Each node checks signatures, amounts, scripts and whether inputs were already spent. Valid unconfirmed transactions commonly wait in a node's mempool.

Name the layer and the actor. Wallets create transactions, nodes check rules, miners propose blocks, and Lightning peers manage channels.

Mine and confirm

A miner assembles candidate transactions and repeatedly hashes a block header. When a valid proof is found, the block propagates and nodes independently verify it before extending their accepted chain.

Build confidence over time

A confirmation means the transaction is in a block. Additional blocks add work above it, increasing the cost of reorganizing that history. The appropriate wait depends on value, risk and context.

A transaction's journey, step by step

Your wallet selects coins you control — earlier outputs — and builds a transaction that spends them to the recipient's address, with change back to you and the remainder left as a fee. It signs each input with the matching private key and hands the result to a few peer nodes.

Each node checks the signatures, confirms the inputs exist and are unspent, verifies the outputs do not exceed the inputs, and relays it. Within seconds it sits in thousands of mempools. A miner includes it in a block; that block is validated by every node; the transaction now has one confirmation, and each further block adds another.

Why nobody can cheat

Three checks, all independent, make fraud impractical. You cannot spend coins you do not control because every node verifies the signature against the public key the coins were locked to. You cannot spend the same coins twice because nodes track the unspent set and reject a second spend, and if two conflicting transactions race, only the one mined first survives.

You cannot rewrite history because changing an old block changes its hash and invalidates every block after it, which would require redoing more proof of work than the rest of the network can produce. Miners order transactions; they cannot invent or alter them.

The numbers behind the design

Blocks arrive every ten minutes on average because the difficulty adjusts every 2,016 blocks to keep them there. A block holds up to 4 million weight units, roughly 2,000–3,000 typical transactions, so the base layer settles a few transactions per second and prices block space by fee rate. The subsidy is 3.125 BTC per block until the next halving at block 1,050,000.

Six confirmations — about an hour — is the conventional threshold for large amounts because the chance of a reorganisation that deep is negligible against the network's current hashrate. None of these numbers is arbitrary, and each is checkable on a node or explorer.

Trace the rule through the network

Follow one transaction from wallet signing to node validation, mempool relay, block inclusion, and confirmations. That sequence shows which facts come from consensus and which depend on local policy.