How Do Bitcoin Transactions Work?

A Bitcoin transaction is a digital message that transfers bitcoin from one address to another. When you send Bitcoin, your wallet uses your private key to sign the transaction, proving that you’re the owner of the funds. This signature can’t be forged, and the private key never leaves your device. The signed transaction is then broadcast to the Bitcoin network.

Once broadcast, the transaction enters the “mempool,” a waiting area where thousands of pending transactions sit until miners include them in a block. Miners prioritize transactions based on the network fee attached to them—higher fees generally mean faster confirmation. When miners successfully add your transaction to a block, it becomes part of the permanent blockchain.

A transaction is considered secure after several confirmations, though for small amounts or Lightning payments, confirmation can be instant. Understanding this flow helps you make sense of why transactions sometimes settle quickly and other times take longer—it's all driven by network activity and the fee you choose.