A transaction spends one or more existing unspent outputs (inputs) and creates new outputs. Because inputs are indivisible whole amounts, if your inputs exceed the amount you want to send, the wallet creates a second, 'change' output sending the remainder back to an address you control.
Fees are not set as a percentage; they are paid as the small leftover between the total input value and the total output value, and the amount you should attach depends on transaction size in virtual bytes and current network demand (covered in 'Selecting fees').
Once broadcast to the peer-to-peer network, a transaction propagates node to node and waits in the mempool until a miner includes it in a block. Before that inclusion, an unconfirmed transaction can in rare cases be replaced or dropped; after confirmation, reversing it would require rewriting the blockchain, which becomes exponentially harder with each additional block.
Sending is irreversible by design: there is no chargeback, no customer service override, and a payment sent to the wrong address or the wrong network cannot generally be recovered unless the recipient voluntarily returns it.
Explain more simply
To send bitcoin, you enter the recipient's address and the amount, your wallet asks you to confirm, and then it broadcasts the transaction to the network.
Double-check the address and amount before confirming: unlike a bank transfer, there is no institution that can call the transaction back.
Real-world analogy
Sending bitcoin is like paying with a large banknote at a stall with no cash register: the vendor keeps what you owe and hands the rest back as a fresh note, rather than 'splitting' the original bill.
Key facts
- A transaction spends whole inputs and creates outputs, including a change output when needed.
- Fees are the leftover between inputs and outputs, sized by transaction weight, not by value sent.
- Confirmed transactions cannot be reversed by any institution.
Common misconception
“You can send a fraction of a UTXO directly, like breaking a coin in half.”
Inputs must be spent whole. If you want to send less than an input's value, the wallet spends the whole input and creates a separate change output for the remainder.[3]
Go deeper
Change addresses are a common source of privacy leakage: naive chain analysis can often guess which output is change, linking the sender's remaining balance to the payment. Coin selection algorithms and consistent address types (avoiding mixing formats) reduce this signal.
Wallets choosing which UTXOs to spend as inputs face a small optimisation problem: fewer, larger inputs reduce the transaction's size (and fee) but may combine coins in a way that harms privacy or leaves awkward remaining amounts (dust).
Quick check
Answer every question correctly (100%) to complete this lesson.
1.What is a 'change output'?
2.What can reverse a confirmed Bitcoin transaction?
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Extra exam questions
Every question here counts towards your accuracy, XP and rank. No guessing: every answer is explained.
Quick check
Answer every question correctly (100%) to complete this lesson.
1.What is a 'change output' in a Bitcoin transaction?
2.What can reverse a confirmed Bitcoin transaction?
3.How are Bitcoin transaction fees typically determined?
4.What must happen if your selected inputs exceed the amount you want to send?
5.What does RBF (Replace-By-Fee) allow a sender to do?
6.Before a transaction confirms, where does it wait?
7.Why can spending fewer, larger UTXOs as inputs reduce fees?
8.What privacy issue can change outputs create?
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Sources
- Bitcoin developer documentation, bitcoin.org / Bitcoin Optech glossary
- Bitcoin Core documentation, Bitcoin Core project
Reference implementation documentation, including validation and release notes.