Transaction is the act of transferring data or digital assets between network participants. In the context of cryptocurrency and blockchain, a transaction represents the fundamental element that allows participants to conduct operations, record information, and confirm consent to change the state of the distributed ledger.
A transaction may include information about the sender, recipient, amount, and other details depending on the specific blockchain implementation.
Transactions in a blockchain enable network participants to transfer information and digital assets without intermediaries, ensuring security and transparency of operations. The transaction process involves creating, signing, transmitting, and confirming the transaction, enabling the blockchain to function as a reliable and decentralized system.
Transaction process in blockchain
The process of conducting a transaction in a blockchain can vary depending on the specific cryptocurrency or blockchain. In general, the process involves the following steps:
- Transaction creation. A participant forms a transaction by providing information about the sender, recipient, and amount. Depending on the blockchain, there may be additional data or parameters such as transaction fees.
- Transaction signing. The transaction is signed using the sender's cryptographic key to ensure security and confirm authorship. This guarantees that only the owner of the corresponding private key can send the transaction.
- Transaction transmission. The signed transaction is sent to the blockchain network for further processing and inclusion in a block. It is propagated by network nodes that validate its correctness, compliance with protocol rules, and data integrity.
- Transaction confirmation. When a transaction receives a sufficient number of confirmations from nodes, it is considered confirmed and included in a block.
Transaction security and confidentiality
Transactions in a blockchain possess a number of advantages in terms of security and confidentiality. They are based on cryptographic principles, providing protection against forgery and manipulation. Each transaction has a unique signature and is linked to previous transactions in the block chain, making it impossible to alter without the consensus of the majority of network participants.
- Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and Cryptocurrency Technologies: A Comprehensive Introduction. Princeton University Press.
- Antonopoulos, A. M. (2017). Mastering Bitcoin: Unlocking Digital Cryptocurrencies. O’Reilly Media.