# Bitcoin (ergo, BSV) Transactions

Bitcoin combines **data (Bit)** and **money (Coin)**. While the coin is the most visible feature, the real power lies in Bitcoin’s **data capabilities**. Think of it as a **global, immutable record of events**.

These events can be anything from:

* **Payments**
* **e-KYC checks**
* **Shipment tracking in supply chains**
* **E-commerce transactions**

All of these are recorded as **transactions** on the BSV ledger. Transactions are grouped into **blocks**, which are timestamped collections of events.

***

### Transaction Structure

A **transaction** is a data structure with fields such as:

* **Version Number**
* **nLockTime**
* **Inputs**
* **Outputs**

For our purposes, we’ll focus on **Inputs** and **Outputs**.

* **Transaction Inputs**: Refer to previous transactions and contain an **unlocking script** that allows the funds to be spent.
* **Transaction Outputs**: Define the **amount** and a **locking script** that sets the conditions for spending.

<figure><img src="/files/0fYPA773ltsORHFTh1df" alt=""><figcaption></figcaption></figure>

### Example Flow: Alice → Bob → Carol → Dave

Let’s walk through an example timeline with three transactions (T1, T2, T3):

1. **T1**: Alice has **51 BSV** and sends **50 BSV** to Bob.
2. **T2**: Bob uses those 50 BSV and sends **49 BSV** to Carol.
3. **T3**: Carol uses her 49 BSV and sends **48 BSV** to Dave.

*Note*: In BSV, **ownership** (not the coins themselves) is transferred.

Each participant—Alice, Bob, Carol, and Dave—has a **private-public key pair**.

***

### Inputs vs. Outputs

To simplify:

* A **Transaction Input** = details of the **payer** (source of funds).
* A **Transaction Output** = details of the **payee** (where funds are sent).

Example:

* In **T2**, Bob pays Carol.
* The **input** of T2 references T1 (where Bob received funds from Alice).
* The **output** of T2 defines Carol’s new ownership.

<figure><img src="/files/2kkG0VbxXhzKVwwlsaq5" alt=""><figcaption></figcaption></figure>

### Scripts: Locking & Unlocking

A powerful feature in BSV is the **Script**.

* A **Locking Script**: Sets a condition (“locks” the funds).
* An **Unlocking Script**: Provides the solution (“unlocks” the funds).

Think of it as a **puzzle and its answer**:

* Example: If the lock says *5 - 3 = ?*, the unlock must provide *2*.

Scripts are written in Bitcoin’s assembly-like language with **operands** and **opcodes**.

***

### Script Evaluation

When a transaction is broadcast:

1. Nodes combine the **unlocking script** from the new transaction with the **locking script** of the referenced previous transaction.
2. They run the script to check if the result is **True or False**.
3. If **True**, the transaction is valid and can proceed.

This mechanism ensures that only the rightful owner (with the correct **private key**) can spend funds.

***

### Transaction Templates

To simplify use, many transactions follow standard **templates**.\
The most common is **Pay-to-Public Key Hash (P2PKH)**.

* **Unlocking Script**: `<Signature> <Public Key>`
* **Locking Script**: `OP_DUP OP_HASH160 <Public Key Hash> OP_EQUALVERIFY OP_CHECKSIG`

Here:

* `<Signature>`, `<Public Key>`, `<Public Key Hash>` are **operands**.
* The rest are **opcodes**.

The key opcode here is **OP\_CHECKSIG**, which verifies **digital signatures**.

***

### Key Takeaway

* **Transactions** in BSV are not just fund transfers—they are **data events** recorded on a global ledger.
* **Inputs reference previous outputs** and require unlocking.
* **Outputs lock new funds** with conditions for future use.
* **Scripts act as puzzles** that must be solved with the correct keys.
* Standardized templates like **P2PKH** make this process practical and secure.

👉 **In short:** BSV transactions are secure, traceable, and flexible—making them useful far beyond simple payments.


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