Marc Steiner
Marc Steiner

Description of Bitcoin Blocks and Transactions

Overview about Bitcoin Transaction

Following description shows a deep inside into how Bitcoin blocks and transactions are looking on a byte-level.

The level of detail is something around six to seven on a scale from 0–10 (10 = Bitcoin hardcore developer). The target audience is a person who wants to understand the technical aspects of a block and transactions.

You should be familiar with Inputs, Outputs and Script language. Maybe this helps:

There are similar descriptions out there, but I have tried to reduce all the noise and come straight to the point.

I use following Block as example 0000000000000000000bd1dcc67100bddc69e85426a2d9b298f15f6fddc2f4d7, with this transaction 69DF7FDCD5AB9BA1CB3FF573731ACF6ED37CC9A1CB92C6ED7FFCABA92605E49B inside the block.

First, we have to understand what is inside of a Bitcoin block. There are two main parts; The block header and the transactions list.

Overview about a Bitcoin block and what is inside

Block Header

The block header contains all of the relevant information to verify a block. The hash of the header represents the information of a block without transactions. Simplified Payment Verification devices (SPV) just save this 80 byte because of limited storage capacity. (Detailed description: LinkLink)

Transaction list

Now, we will have a closer look into the structure of one transaction. There are a lot of “byte-information” inside a single transaction. The same concept here; Just the SHA-256 hash of the full transaction information is stored in the Bitcoin block as the following pictures shows.

Method from a raw Bitcoin HEX transaction into a block

It is now interesting to understand how the byte structure of this transaction look like. A Bitcoin transaction based on the concept of inputs (“crawling” the Bitcoin to spend from a previous transaction) and outputs (how many Bitcoin will be sent to the next address). On byte level it looks like this:

Detailed analysis of a raw Bitcoin transaction

Description of Bitcoin Inputs

Transaction version (fix 4 byte): 
Identifies the protocol version being used by the node, currently “1”. (Detailed description: Link)

Input Count / Number of inputs (1–9 byte):
Indicates the upcoming number of inputs in this transaction.(Detailed description: Link)

Previous transaction hash (fix 32 byte):
Link to an existing transaction in the previous parent block (last block of Blockchain) so that the node knows to which block the new block must be linked. (Detailed description: Link)

Output index of previous transaction outputs (fix 4 byte):
Every output has a index number. The first output is index “0”. The index number shows which output (UTXO) from a previous transaction will be spent in this new transaction. (Detailed description: LinkLink)

Input script length (1–9 bytes):
Defines how long (number of bytes) the following input script (unlocking code) is.

ScriptSig operation:
Defines what the node has to do. OP_PUSHDATA, pushes the defined number of bytes on the stack. (Detailed description: LinkLink)

ScriptSig data (many bytes):
Unlocking script, that unlocks your Bitcoin which will be spent (is part of each input script). The script checks if the conditions are full-filled to spend the unspent transaction output (UTXO). Or in more easy words: Unlocking code checks, if your are allowed to spend the Bitcoins you want to send.(Detailed description: LinkLink)

Input sequence number (fix 4 byte):
Normally 0xFFFFFFFF. Irrelevant unless transaction’s locktime is >0. A number intended to allow unconfirmed time-locked transactions to be updated before being finalized; currently not used except to disable locktime in a transaction. (Detailed description: Link)

Description of Bitcoin Outputs

Number of outputs (1–9 bytes):
How many outputs are following and will be spent (upcoming number of outputs).

Output value (fix 8 byte):
Specifies how many Bitcoin in Satoshi (BTC/ 10⁸) will be transfered to the next address.(Detailed description: Link)

Output Script length (1–9 bytes):
Defines how long (number of bytes) the following output script (locking code) is: ScriptPubKey Operation+ ScriptSig data.(Detailed description: Link)

ScriptPubKey operation:
Defines the steps, what the node has to do next (script).

ScriptPubKey data (many bytes):
Locking script, that defines the conditions when the outputs (Bitcoins) could be spent in a next transaction or more technical: It is a short script that explains what conditions must be met to claim ownership of bitcoins. The name “ScriptPubKey” comes from the fact, that this script needs a publicKey .(Detailed description: LinkLinkLinkLink)

Transaction lock time (4 byte):
Defines the earliest time that a transaction is valid (or minimum block height) and can be relayed on the network or added to the blockchain. (Detailed description: Link)

Note: bytes are little endian

Here you find a similar article on Medium with beautiful graphics.


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Marc Steiner
Marc Steiner

Bitcoin-Berater & Digital-Experte

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