How a Bitcoin Transaction Works

        The bitcoins that you send to someone were sent to you from someone else. When they sent them to you, the address they sent them from was registered on the bitcoin blockchain (the encrypted and unaccessible register) as the transaction input. Your address—the address they sent it to—was registered on the bitcoin network as the transaction output.

        When you send that bitcoin to someone else, your wallet creates a transaction output, which is the address of the person you’re sending the coin to. That transaction will then be registered on the bitcoin network with your bitcoin address as the transaction input.

        When that person sends those bitcoins to someone else, their address will, in turn, become the transaction input, and that other person’s bitcoin address will be the transaction output.

• Point  to  be Noted:-
  
  Using this system, people can trace bitcoin transactions all the way back to when the bitcoin was first created. Anyone can understand who sent it to who at any point in time. This creates an entirely transparent system in which all transactions can be checked at any time.