04 - Bitcoin's Transaction Protocol

Part of the Bitcoin protocol is a rigid definition of the makeup of a Bitcoin transaction.

The conditions which determine whether transactions are valid or not are governed by rules that we will look at in more detail in subsequent chapters. For now, we will look at the structure of the transactions themselves with a view to understanding how the Bitcoin script itself is evaluated in the process of spending coins on the network.

All transactions are defined using a serialisation format comprised of a number of fixed and variable length fields concatenated into a single string. This can be likened to a Protobuffer.

Transaction are created using the following elements:

1. Version No. (4 bytes)

2. Quantity of transaction inputs (varInt, 1-9 bytes) ← link to Varint page on BSV wiki

3. The list of inputs in input structure format which is defined as:

   1. The TXID the input is from (32 byte little endian hash)

   2. The output index of the input (4 byte little endian integer)

   3. The length of the scriptSig (varInt, 1-9 bytes)

   4. The scriptSig

   5. The input's nSequence value (4 byte little endian integer)

4. Quantity of transaction outputs (varInt, 1-9 bytes)

5. The list of outputs in output structure format which is defined as:

   1. The output's satoshi value (8 byte little endian integer)

   2. The length of the scriptPubKey

   3. The scriptPubKey

6. The transaction's nLocktime

The transaction itself is all of these elements serialised as a bytevector.

To see this, let us look at an example of a Bitcoin transaction.

This is the public record of Satoshi Nakamoto sending Hal Finney 10 Bitcoins in block no. 170. You can find the transaction in the whatssonchain block explorer here. When represented as a hexadecimal string, the transaction looks like this: 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