blockchain – How does Bitcoin confirm {that a} consumer owns the bitcoins he/she spent?


Bitcoin would not actually care about balances or possession. It would not must.

Bitcoin is money, not an account. There isn’t any system that tells a storekeeper what number of $10 payments (banknotes) you may have below your mattress. The storekeeper would not care. They solely care that the $10 invoice you hand them shouldn’t be faux.

Do not let the terminology confuse you. The bitcoin blockchain is not a ledger that retains observe of balances. It’s a transaction journal that data solely half of a real-life transaction – the half the place A offers B some Bitcoin cash, not the half the place B offers A a pizza.

The transaction has inputs and outputs. The inputs are “cash” that A is giving up and the outputs are sometimes a brand new “coin” that B is getting and a brand new “coin” that A will get again as change (since Pizzas not often price precisely $10).

A Bitcoin “coin” is basically simply an output quantity from an earlier transaction that has not but been spent in a subsequent transaction. It’s an Unspent Transaction Output (a UTXO).

Bitcoin nodes simply hold observe of UTXOs. When a UTXO is spent, the U in its title now not applies. Each node observing the spend removes that TXO from its listing of UTXOs. So each node seeing a second spend of a TXO would know that TXO is no longer a UTXO and reject that second spend as invalid.

If a pockets stories a false stability to its proprietor, nobody is harmed however the proprietor. A faux stability doesn’t allow you to spend cash you do not have. Its like a leather-based pockets that has “$30” written on the surface however which solely accommodates two $10 payments.

That is the distinction between financial institution accounts and money.

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