Mastering Blockchain - Second Edition

The transaction life cycle

The following steps describe the transaction life cycle:

1. A user/sender sends a transaction using wallet software or some other interface.
2. The wallet software signs the transaction using the sender's private key.
3. The transaction is broadcasted to the Bitcoin network using a flooding algorithm.
4. Mining nodes (miners) who are listening for the transactions verify and include this transaction in the next block to be mined. Just before the transaction are placed in the block they are placed in a special memory buffer called transaction pool. The purpose of the transaction pool is explained in the next section.
5. Mining starts, which is a process by which the blockchain is secured and new coins are generated as a reward ...