Transactions
Addresses, Balances, Transactions
Addresses
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Addresses are big random numbers, derived from a public key, that allow bitcoin to be transferred from one private key to another.
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You can create an infinite number of addresses from any public key, and it’s considered best practice to create a new address every time someone sends you bitcoin.
Balances and UTXOs
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Balances are the amount of bitcoin associated with a given private key.
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Balances are calculated by summing up the amount of bitcoin associated with that key.
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In this state the individual bitcoin amounts are called UTXOs, or Unspent Transaction Output.
Transactions
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A bitcoin transaction is how bitcoin ultimately is transferred from one address to another.
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Transactions are broadcast to the entire bitcoin network of nodes.
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Transactions are collected into blocks, which are then processed by miners.