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March 26, 2021, 11:43:50 AM Last edit: March 26, 2021, 12:16:25 PM by 20kevin20 |
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You receive 1 BTC from me. Before you received it, it was considered an unspent output sitting in my wallet. When I'm creating the transaction, the 1 BTC now becomes an "input" I'm sending to your address (the output). And until you spend the coin I gave you, it's known as unspent. After you spend it, it becomes spent.
Now say I gave you another 0.5 BTC. You now own two unspent outputs (1 BTC + 0.5 BTC). If you want to move those together to a paper wallet, when you create the transaction what happens is.. the two unspent outputs become your transaction's inputs and the paper wallet becomes the output.
Bitcoins aren't stored in "intermediate addresses" or anything of that sort. They just move from address to address.
You go to a BTC ATM and purchase 1 BTC that is sent to your personal wallet's address. Now, you own 1 BTC which is known to the blockchain as an "unspent output".
Now let's say you want to split your Bitcoins into two: you want to fund a paper wallet with 0.25 BTC and keep the rest in your personal wallet as a change. When you do this, you are first of all spending your first unspent output (the 1 BTC) and you're not only doing that but you're also splitting the output into two: the 0.25 BTC paper wallet funding and the 0.75 BTC that you keep as a change.
When initializing the transaction, you have the initial unspent 1 BTC as the input (think of the input as money you want to spend) and two outputs: - 0.25 - going to paper wallet - 0.75 - the change
So now, the ledger knows the following: - The 1 BTC you bought from the ATM is now spent - An address now owns 0.25 BTC, which becomes an unspent output - Another address now owns 0.75 BTC, which becomes another unspent output.
Edit: I think something's wrong with this explanation so I'd rather strike it, lol.
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