BA-05 · LESSON 02

Inputs, outputs, and change

KEY DEFINITIONS

Terms used in this lesson

Outpoint: A transaction ID plus output number that identifies one exact prior output.
Witness: Signatures, scripts, or other data supplied to satisfy a Bitcoin output’s spending condition.
UTXO: Unspent transaction output: one discrete chunk of bitcoin that can be used as a transaction input.
Transaction ID: The identifier produced by hashing a Bitcoin transaction’s non-witness serialization.
Identifier: Identifier: a value used to distinguish one request, object, or participant from another.

Inputs reference prior outpoints and provide witnesses; outputs assign values to new locking conditions.

45 min Difficulty 2/5 Not started

VISUAL MODEL

See the whole mechanism before going step by step

Use the diagrams to orient yourself. Then the guided explanation below teaches every part in depth.

4 explanatory views

CONCEPT-SPECIFIC MAP · payment constructionCoin selection determines fee, change, and privacySelect any state to inspect its exact role.

RELATIONSHIP MAPInputs, rule, and outputs

01
AVAILABLE70k, 45k, 20k
The wallet sees spendable outputs, not a single protocol balance.
02
SELECT70k + 45k
Different valid selections change size, fee, and the amount revealed as change.
03
TARGET80,000 sats
The payment output commits exactly 80,000 sats to the recipient script.
04
FEE1,200 sats
The required fee depends on transaction weight and the chosen fee rate.
05
CHANGE33,800 sats
Both constructions balance. The wallet must avoid creating uneconomic dust.

Rule shown: The wallet chooses complete inputs, constructs payment and optional change outputs, then signs the resulting input commitments.

STAGE 1 OF 5AVAILABLE: 70k, 45k, 20k

The wallet sees spendable outputs, not a single protocol balance.

Governing relationship: The wallet chooses complete inputs, constructs payment and optional change outputs, then signs the resulting input commitments. Complete path: 1. AVAILABLE, 70k, 45k, 20k. The wallet sees spendable outputs, not a single protocol balance. 2. SELECT, 70k + 45k. Different valid selections change size, fee, and the amount revealed as change. 3. TARGET, 80,000 sats. The payment output commits exactly 80,000 sats to the recipient script. 4. FEE, 1,200 sats. The required fee depends on transaction weight and the chosen fee rate. 5. CHANGE, 33,800 sats. Both constructions balance. The wallet must avoid creating uneconomic dust.

1. State transitionWhat exists, what changes, and what results

BEFORE

A wallet selects UTXOs of 70,000 and 45,000 sats to pay 80,000 sats with a 1,200-sat fee.

MECHANISM

A wallet chooses exact unspent outputs. Each selected output will be consumed in full if the transaction confirms.

AFTER

Change does not return part of either original output. It is a new output in the same transaction.

Text equivalent: Starting from A wallet selects UTXOs of 70,000 and 45,000 sats to pay 80,000 sats with a 1,200-sat fee. The mechanism begins when A wallet chooses exact unspent outputs. Each selected output will be consumed in full if the transaction confirms. The resulting lesson is Change does not return part of either original output. It is a new output in the same transaction.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 5

Select complete UTXOs

A wallet chooses exact unspent outputs. Each selected output will be consumed in full if the transaction confirms.

Complete path: 1. Select complete UTXOs: A wallet chooses exact unspent outputs. Each selected output will be consumed in full if the transaction confirms. 2. Create recipient output: The wallet decodes the destination and creates a new output with the payment amount and matching scriptPubKey. 3. Calculate fee and change: Fee equals total input value minus total output value. If the remainder is economical to keep, the wallet creates a change output under its own policy. 4. Authorize each input: The wallet computes the required signature digest and supplies a scriptSig or witness appropriate to each prior output. 5. Validate the complete transition: Nodes check every outpoint exists and is unspent, authorization succeeds, output amounts are valid, and total outputs do not exceed total inputs.

3. Rule and failure boundaryWhat accepts the result and where it can stop

ACCEPTED PATH

Every named outpoint must be live and uniquely consumed, every witness must authorize its prior script, and integer input value must equal outputs plus fee before the UTXO set changes.

CHANGED CONDITION

A missing outpoint, bad witness, duplicate input, or output value above inputs rejects atomically and preserves the complete prior UTXO set.

Important distinction: The larger input is reduced by the payment and the smaller input remains untouched. Every referenced input is consumed whole. The transaction explicitly creates any retained value as change.

Text equivalent: The accepted path is enforced by Every named outpoint must be live and uniquely consumed, every witness must authorize its prior script, and integer input value must equal outputs plus fee before the UTXO set changes. If the required condition changes, A missing outpoint, bad witness, duplicate input, or output value above inputs rejects atomically and preserves the complete prior UTXO set.

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Learn the idea

A Bitcoin transaction input identifies one earlier output by its transaction ID and output index, a pair called an outpoint. The input supplies unlocking witness data and fields such as sequence. A transaction output creates a new amount in satoshis plus a locking script. Change is simply a new output controlled by the spender, not money left inside an input.

GUIDED EXPLANATION1/5 ideas inspected

Select complete UTXOs

A wallet chooses exact unspent outputs. Each selected output will be consumed in full if the transaction confirms.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“The larger input is reduced by the payment and the smaller input remains untouched.”

Every referenced input is consumed whole. The transaction explicitly creates any retained value as change.

FINISH LEARNING FIRST

The questions unlock after every required learning activity

Inspect every guided idea, open the worked example, rebuild its mechanism, and complete the deterministic lesson tool. Your progress is saved automatically.