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A blockchain transaction becomes part of the shared record when a wallet signs it, network participants validate it, and the network’s consensus process accepts a block containing it. The exact consensus method varies: Bitcoin uses proof of work, while Ethereum uses proof of stake.
1. A wallet signs a transaction
A wallet manages the keys and transaction details needed to authorize an action; it is not where the blockchain’s transaction history is stored. The wallet uses a private key to create a digital signature. The signature shows that the transaction was authorized by someone able to use the relevant key and makes later changes detectable. Bitcoin.org’s explanation of Bitcoin describes this role.
2. The transaction is broadcast and checked
The signed transaction is sent to network participants, which check it against the rules of that blockchain. Bitcoin full nodes independently validate transactions and blocks. In Bitcoin, a payment must spend outputs that are still unspent; an output cannot be spent a second time under the network’s rules. This is how validation helps prevent double spending. The Bitcoin Developer Guide explains transaction validation and unspent transaction outputs.
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3. Valid transactions are grouped into a block
Transactions that pass the network’s checks can be gathered into a block. In Bitcoin, transaction identifiers are combined through a Merkle tree, and its root is included in the block header. That root commits the header to the block’s transaction contents. The Bitcoin Developer Guide’s block-chain documentation describes this structure.
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4. Consensus determines which block is accepted
A block producer proposes a candidate block, but proposal alone does not make it part of the accepted record. The network’s participants use consensus rules to determine which history to accept, and nodes independently reject blocks or transactions that violate those rules.
Bitcoin: proof of work
Bitcoin miners compete to produce a block through proof of work. Full nodes check a proposed block against Bitcoin’s rules rather than accepting it simply because a miner produced it. Bitcoin.org outlines this process.
Ethereum: proof of stake
Ethereum’s documented process uses proof of stake: a validator proposes a block and other participants check it. Provably dishonest behavior can result in stake being destroyed. This is a different consensus design from Bitcoin mining, not another name for the same process. Ethereum.org’s block documentation describes Ethereum’s validators and blocks.
5. The block links to earlier blocks
A block header refers to the preceding block, linking blocks into an ordered history. If someone alters old data, its cryptographic hashes change and the altered block no longer matches the later links. The further blocks build on a block, the harder it becomes to change that earlier history without detection and without conflicting with the accepted chain. The Bitcoin Developer Guide explains these links.
6. Confirmations increase confidence
For Bitcoin, a transaction notification is not the same as a confirmed transaction: confirmation means a block containing the transaction has been accepted into the chain. More blocks built on top of that block provide additional confirmations and increase confidence, but they do not make the transaction instantly or absolutely irreversible.
Bitcoin block discovery is probabilistic. New blocks arrive around an average interval, but there is no guaranteed minimum or maximum wait for a transaction to be included or confirmed. Bitcoin.org’s practical guidance cautions that transactions do not become irreversible immediately.
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What differs between blockchains
The broad sequence—authorization, validation, block proposal, and agreement on an ordered record—helps explain how a blockchain transaction is recorded. The details depend on the network, including who proposes blocks, what consensus evidence is used, how nodes reject invalid data, and how that network defines confirmation or finality. Bitcoin and Ethereum illustrate two distinct approaches; their processes should not be treated as universal rules for every blockchain.
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