Learn how Bitcoin transactions work and why, with BSV Academy’s guides

Learn how Bitcoin transactions work and why, with BSV Academy’s guides

Want to know how Bitcoin transactions work? BSV Academy has launched a series of video tutorials that teach the basics. The first, “Introduction to Bitcoin Transactions,” is hosted by Britevue founder Connor Murray, who explains concepts such as Bitcoin’s UTXO model, inputs and outputs, used and unused values, and how the network determines whether a transaction is valid or not.

The training was livestreamed, and the recording will remain on BSV Academy’s channel. Subscribing to the channel will ensure that you hear about future feeds and participate in direct questions and answers after the presentations.

Murray said the training is for entrepreneurs, developers and other interested parties in the area. It learns how Bitcoin transactions work at a basic level, but also looks at ways to “think outside the box” using Bitcoin Script – such as time-locking and unlocking transactions.

The tutorial refers to the 2008 Bitcoin White Paper and its definition of transactions. Murray gets pretty technical from the start, explaining how Bitcoin transactions use inputs and outputs to decide who can use what. This description is important for developers coming from platforms like Ethereum since Bitcoin uses a UTXO (Unspent Transaction Output) model, as opposed to Ethereum’s “account model”. While it may seem daunting at first, the UTXO model is what allows Bitcoin to scale.

Bitcoin Script is the way to perform more complex transactions on Bitcoin. Although Script is not mentioned in the White Paper, it was part of the original release code. It would be impossible to imagine all possible uses for Bitcoin (and its transactions) at the time of launch, and new ones will continue to be explored well into the future. Satoshi Nakamoto wrote that he had previously considered deposit, bound contracts, third-party arbitration, multi-party signatures and others.

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Bitcoin’s core design and rules have been “set in stone” from the start, and the way transactions work must remain fundamental. So the more flexible Bitcoin script acts as a predicate for a transaction – that is, an equation that returns true or false, and answers the question “can these coins be used or not?”

A Bitcoin transaction consists of a lock script and an unlock script. Murray refers to Locking Script (also called “scriptPubKey”) as the combination on a padlock. Unlocking Script (called “scriptSig”) is the solution to Locking Script. ‘ teach them.)

Murray then demonstrates how a script works by loading examples into Bitcoin’s data stack. He uses understandable true / false questions (math and non-math) to show how the results are evaluated using different Bitcoin “OP codes.”

He notes that this demonstration is just a basic “pay-to-public-key-hash” (P2PKH) transaction, which is how most Bitcoin transactions happen these days. However, this is not the only way – Bitcoin was originally designed to perform transactions directly between IP addresses, and there is a deeper problem (you can find more background on this here).

P2PKH means paying to the known “Bitcoin address”, something other than newcomers will be familiar with. Murray adds that there are far more complex ways to use Script to determine if a transaction is valid, including the use of Hash Puzzles, R-Puzzles, Zero-Knowledge Proofs (ZPKs) and more. Knowing the more complex operations will unlock Bitcoin’s ability to perform almost any task that can be performed on any other blockchain.

BSV’s strength lies in its unlimited scalability, and the transaction model is part of how it achieves this. This power has been coded into Bitcoin since its launch in 2009 and has always been Satoshi Nakamoto’s original vision. Developers working with other blockchains will do well to see these tutorials and start learning how to switch their projects to Bitcoin.

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Check out BSV Academy’s free online course to learn more about Bitcoin.

New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.

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