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A blockchain transaction becomes part of an agreed record through a sequence of signing, network checks, block creation and consensus. The exact consensus rules vary by blockchain: Bitcoin uses proof of work, while Ethereum uses proof of stake. In both examples, participating nodes check proposed data against the network’s rules rather than simply accepting a wallet’s claim.
1. A wallet signs a transaction
A wallet prepares a transaction and uses a private key to create a digital signature authorizing it. The signature is evidence that the transaction was authorized by someone able to use the relevant key, and it makes later alteration detectable. A wallet manages keys and transactions; it is not where the blockchain’s transaction history is stored. Bitcoin.org explains Bitcoin’s use of keys and signatures.
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2. The network receives and checks it
The transaction is broadcast to participants in the network. Nodes check whether it follows that blockchain’s rules before treating it as valid. In Bitcoin, full nodes independently validate transactions and blocks. A Bitcoin payment must spend outputs that remain unspent; an output already spent cannot be spent again under the rules. This is how Bitcoin’s transaction model prevents a valid double spend. The Bitcoin Developer Guide describes transaction validation and unspent outputs.
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A block groups transactions together. In Bitcoin, transaction identifiers are combined in a Merkle tree, and its root is included in the block header. That root commits the block to its transaction contents, so a change to a transaction changes the commitment. The Bitcoin Developer Guide explains the block structure.
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4. Consensus determines which proposed block is accepted
Block creation and agreement work differently across networks. Bitcoin and Ethereum illustrate two distinct approaches, not a universal blockchain process.
Bitcoin: proof of work
Bitcoin miners compete to produce a candidate block through proof of work. Mining proposes a block, but it does not exempt that block from scrutiny: full nodes independently check it against Bitcoin’s consensus rules and reject invalid data. Bitcoin.org describes mining and the Bitcoin Developer Guide covers node validation.
Ethereum: proof of stake
Ethereum uses validators: one proposes a block and other participants check it. Ethereum’s proof-of-stake design can destroy stake for provably dishonest behavior. This differs from Bitcoin’s proof-of-work mining, even though both systems use blocks and network validation. Ethereum.org explains Ethereum blocks and validators.
5. Blocks link into an ordered history
Each block header refers to the preceding block. Changing earlier data changes its cryptographic hash, which then conflicts with the references in later blocks. This linking makes undetected alteration of old history difficult; it does not make every transaction instantly irreversible. The Bitcoin Developer Guide details the chain of block references.
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6. Confirmations increase confidence
When a Bitcoin transaction is included in a block, it has a confirmation; later blocks add further confirmations. Block discovery is probabilistic: blocks arrive around an average interval, but a particular transaction has no guaranteed minimum or maximum wait. Additional confirmations increase confidence in the recorded transaction rather than creating immediate, absolute irreversibility. A wallet or service notification that a transaction was broadcast is not by itself proof that it has been confirmed. Bitcoin.org explains confirmation timing and the limits of reversibility.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How the examples differ
| Question | Bitcoin | Ethereum |
|---|---|---|
| Who proposes blocks? | Miners compete to create a candidate block. | A validator proposes a block. |
| Consensus design | Proof of work. | Proof of stake. |
| How are invalid blocks handled? | Full nodes independently check blocks against consensus rules. | Other participants check proposed blocks. |
| What does confirmation mean? | Further blocks build on the transaction’s block, increasing confidence; timing is probabilistic. | The cited block explanation describes validator proposals and checks; it does not establish a comparable confirmation-time rule. |
These examples show the shared pattern—transactions are checked, blocks are proposed, and the network follows rules for an accepted history—alongside a key difference: the mechanism used to reach agreement depends on the blockchain.
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