In this article, we will provide a detailed explanation of what a cryptocurrency transaction is. We will also discuss how they work and some of the key features and actors that make them so possible.
A cryptocurrency transaction is a digital exchange of value between two parties. This can be done through a variety of means, but most commonly it is done through the use of a digital wallet. A wallet is a software program that stores your private and public keys and interacts with the blockchain to enable you to send and receive cryptocurrencies.
In order for a transaction to take place, there must be a wallet sending and a wallet receiving. The sender initiates the transaction by sending a certain amount of cryptocurrency to the receiver's wallet address. After the transaction is sent out to the network, it goes to the meme pool. There, all transactions are grouped together in order according to the fees being paid. It is then verified by, depending on the consensus system, the miners (Proof of Work) or the validators (Proof of Stake).
In order for a transaction to happen, miners or validators have to check before that there is no double-spending. This is the reason why decentralization is good, due to different nodes around the world having a consensus in a public ledger. Miners or validators are responsible for verifying transactions and ensuring that they are valid. Once a transaction is verified, it is then added to the blockchain. The blockchain is a public ledger of all cryptocurrency transactions that have ever taken place.
The receiver of the funds can then use them however they please. Transaction fees are paid to the miners or validators in order for them to verify the transaction. These fees are typically very small, but they can vary depending on the network conditions.