Mastering Blockchain - Second Edition

Transaction verification

This verification process is performed by Bitcoin nodes. The following is described in the Bitcoin developer guide:

1. Check the syntax and ensure that the syntax and data structure of the transaction conforms to the rules provided by the protocol.
2. Verify that no transaction inputs and outputs are empty.
3. Check whether the size in bytes is less than the maximum block size.
4. The output value must be in the allowed money range (0 to 21 million BTC).
5. All inputs must have a specified previous output, except for coinbase transactions, which should not be relayed.
6. Verify that nLockTime must not exceed 31-bits. (nLockTime specifies the time before which transaction will not be included in the block.)
7. For a transaction to be valid, ...