Crypto wallets allow users to easily store, send, and pay for goods using cryptocurrency. But how does the actual transaction process work in detail? We explore this question here and explain related terms including miner awards, UTXO or unspent transaction output, Merkle Trees, and block explorers that let you search for transactions in the network. If you are looking for a deep dive into how cryptocurrency is created in the first place, read our How Does cryptocurrency Work? article.

The cryptocurrency Transaction Process Behind the Scenes

Let's introduce cryptocurrency transaction procedures with the following scenario:
• Bob, an online merchant, decides to accept cryptocurrencys as payment.
• Alice, a buyer, has cryptocurrencys and wants to purchase merchandise from Bob.

Wallets are files that provide access to multiple cryptocurrency addresses.
An address is a string of letters and numbers, such as 1HULMwZEPkjEPech43BeKJL1ybLCWrfDpN. Each address has its own balance of cryptocurrencys.
Imagine the addresses as bank accounts, but they work a bit differently. cryptocurrency users can create as many addresses as they want.