Inputs and outputs – Bitcoin “change” explained

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Did you ever try to send out Bitcoins and found out that a larger amount than what you intended seemed to be sent ? Here’s an explanation why this happens…

The blockchain is a big file that keeps track of all Bitcoin transactions ever made. So if you own some Bitcoins, all it means is that the blockchain has references to transactions that were made to your Bitcoin address. The term for these references is “Inputs”.

Now let’s say you enter a store to buy a watch for 1 Bitcoin. instead of taking out actual cash from your pocket and paying for something you just tell the seller – “here are the references that I have this money” or “here are my inputs”.

What you mean is – here are previous transactions sent to me that add up to 1 Bitcoin or more. This is called an output, so each output is compiled out of 1 or more previous inputs.

Once you use an input to pay for something it is considered “spent” and you can’t use it again for other outputs. So in this case once your output is confirmed it will become an input for the seller to use in future transactions.

Bitcoin rules state that you can’t use just a part of an input. So if for example I wanted to send the seller 1 Bitcoin and the only input or reference I have is from someone who previously sent me 1.5 Bitcoins I will have to use all of this input and return the “change” back to my original address as a new input. So I will use my 1.5 Bitcoins input, pay 1 Bitcoin to the seller, pay a miner’s fee and return the rest to my original address.

Now for a real live example – if you examine the inputs closely you will see that the output consists of an input of 0.142 Bitcoins. 0.005 Bitcoins were sent to someone else, a miner’s fee of 0.0001 Bitcoins was deducted and the rest of the money was sent back to the original address.

That’s why you’ll sometimes see additional coins sent with your transactions. These coins will be sent back to your change address which you can configure manually inside your wallet.

If you want to inquire more on specific inputs you can enable “advanced” mode in Blockchain, track inputs and see which inputs have been spent or not.

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Ofir Beigel

Owner at 99 Coins ltd.
Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

22 Comments

  1. I know thousands and thousands of people rely on Bitcoin but for me it sounds like sorcery! I’m not bashing it or anything but we got so used to real money that it sounds soo strange!

  2. People are quick into judging and labeling everything they see before actually giving it a try. Some of my friends immediately began saying Bitcoin is a scam and I would get homeless if I decide to change some of my investments in bitcoins. This is downright silly and this is the reason why few are getting richer and richer while most of us are in huge debt: if you don’t take a chance and decide to go against the wind you won’t amount to anything.

  3. Anette Cecilie on

    The video is pretty straightforward, I hate it when people use very economical terms to explain how Bitcoin works.

  4. William Silva on

    I recently started reading about Bitcoin mining and I was also checking your guide, Ofir, and it answered all my questions, thanks!

  5. John Matthews on

    I was a bit eerie about Bitcoin at first; just when I decided to invest some money in this I started reading about how Governments don’t like the fact that it’s unregulated and they don’t have any control over it. This was a huge bummer and made me lose my enthusiasm. Do you think worldwide economical forces could take over Bitcoin and make it theirs?

    • Bitcoin doesn’t belong to anyone, so governments can take over it. They can try and regulate it but it’s more a matter of supply and demand in my opinion. Even if a country bans Bitcoin entirely people will still be able to trade it semi anonymously.

  6. Stephen Segura on

    Bitcoin seems to be everywhere lately! I had absolutely no clue how to use it and if it’s worth using it. I’m not one to jump head first into new trends so I had to do my research first. You have tons of knowledgeable and easy to understand videos, thanks for providing these resources for free.

  7. Jason McIntyre on

    One of the best things about Bitcoin is the fact that there’s no currency converter; a Bitcoin has the same value, regardless of your country and currency. I use it from buying food and clothes to electronics; I bought my girlfriend a Dell laptop directly from their site. The future clearly belongs to digital currency!

    • Well I guess it depends on how you look at it. In the future there will indeed be no currency convertor but today people still attach Fiat value to Bitcoin whenever they purchase something.

  8. Samantha Rotterns on

    What I love most about Bitcoin is that everything is done anonymously. There’s no need to publicly share your name or other personal details, only your wallet ID will be made public after the transaction is done. I know, I know, bitcoins are used by drug dealers and people that don’t want the transaction being traced back to them, but no currency is PERFECT.

  9. Michael Towner on

    I absolutely loathe banks and their outrageous commissions and fees. I joined the Bitcoin train two years ago and it was the best decision I ever made. A bitcoin is right now worth $586 and while it may be considered stagnant by some, I can bet you it will start growing in the near future and become more and more popular.

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