What is a blockchain transaction?

In one sentence

A blockchain transaction is a signed instruction, broadcast to the network, that asks for the shared record to be changed in one specific way — for example, moving units between addresses or calling a smart contract.

A UTXO transaction: one earlier output is used up in full, creating a payment, change and a fee.

How it works

A transaction goes through a predictable life cycle. Wallet software builds it and signs it with the sender's private key. It is broadcast to a node, which checks it and relays it to peers. Every node that receives it runs the same checks: is the signature valid, does the sender control what is being moved, has it already been spent, is there a fee? Valid transactions wait in each node's mempool until a block producer includes them in a block. Each block added afterwards counts as a further confirmation.

Blockchains keep accounts in one of two main ways. Bitcoin uses unspent transaction outputs (UTXOs): each transaction consumes earlier outputs in full and creates new ones, including "change" that goes back to the sender. Ethereum uses an account model: each account has a balance, and every transaction from an account carries a sequence number so that it is processed exactly once and in order.

On public blockchains, transactions are visible to everyone: the addresses, the amounts and the time they were included.

A simple example

Ana controls one unspent output worth 1.0 unit and wants to pay 0.3. Her transaction spends the whole 1.0 output and creates two new outputs: 0.3 for the recipient and 0.6995 back to a fresh address of her own. The missing 0.0005 is not lost — it is the fee, collected by whoever includes the transaction in a block.

Common misconception

Misconception: A transaction is final the moment I press "send".

In fact: Until it is included in a block, a transaction is only a request. It can wait, be dropped, or be replaced by a version with a higher fee. Even after inclusion, confidence grows with each further block; see the card on finality.

Where you meet it

Block explorers, which list each transaction with its inputs, outputs and fee.
Calls to smart contracts, which are transactions too.
The double-spending problem that the whole system is designed to prevent.

Sources

This card explains a technical concept for general education. It is not a recommendation to acquire, sell or hold any crypto-asset, and it is not financial advice.