Chapter 10 - 0 of 10 quizzes passed
Payment Journey
Follow a payment from wallet intent to confirmed settlement.
- Sequence a payment from wallet construction through confirmation
- Name the main failure modes and what a confirmation actually guarantees
Wallet builds
The wallet starts the journey by selecting UTXOs, adding the recipient’s address as an output, calculating change, and choosing a fee rate. Coin selection affects fee, privacy, and which coins are linked together. A good wallet shows the destination, amount, and fee before signing.
Alice signs
The wallet signs the sighash with Alice’s private key. The signature authorizes the selected inputs and the outputs covered by the sighash type. It does not reveal the key. On a hardware wallet, this is the moment to verify the destination and amount on the device screen.
Node validates
The node checks the transaction before trusting it: signatures must verify, inputs must be unspent, values must balance, and scripts must pass. A rejecting node will not relay it. Someone can still submit it elsewhere, including directly to a miner; a consensus-invalid transaction cannot be included in a valid chain. Relay policy can also reject a transaction that is consensus-valid.
Relay and mempool
Valid unconfirmed transactions are relayed from node to node. Each node keeps its own mempool, so “in the mempool” is not one global waiting room. Miners choose transactions by fee rate and other policy rules. A transaction can be present on one node and absent on another.
Miner includes
The miner selects transactions from its mempool, builds a candidate block, and searches for proof of work. If the miner wins, the payment appears in a block. Other miners may build on that block, adding confirmations. A transaction can also be replaced (RBF) or accelerated (CPFP) before it confirms.
Confirmations accumulate
Each later block adds more proof of work above Alice’s payment, making reversal more expensive. One confirmation is a strong signal for small payments; larger payments often wait for more. A confirmation is not a legal guarantee, and a deep reorganization is possible, just costly. The practical threshold depends on the amount and the risk.
Network Lab
See it in the simulation
Follow Alice’s payment to Bethlehem.
What you should take away
A payment is built, signed, validated, relayed, mined, and confirmed. Each step has failure modes: bad scripts, low fees, replacement, dropped transactions, and shallow reorganizations.
Retrieve, then apply
Trace build → sign → validate → relay → mine → confirm. Name one failure before confirmation and one risk after it.
Check your explanation
Before confirmation: rejected policy, invalid signature, low fee, replacement or eviction. After inclusion: a reorganization can remove the containing block; later confirmations reduce but do not eliminate that risk.
Checkpoint
Sources
Reviewed 2026-10-25 · not financial advice