This verification process is performed by Bitcoin nodes.
The following is described in the Bitcoin developer guide: 1.
From Initiation to Immutable Confirmation (Part 2)
Check the syntax and ensure that the syntax and data structure of the transaction conforms to the rules provided by the protocol.
Check whether the size in bytes is less than the maximum block size.
The output value must be in the allowed money range (0 to 21 million BTC).
All inputs must have a specified previous output, except for coinbase transactions, which should not be relayed.
For a transaction to be valid, it should not be less than 100 bytes.
The number of signature operations in a standard transaction should be less than or not more than two.
Why This Matters for Blockchain Technology
Reject nonstandard transactions; for example, ScriptSig is allowed to only push numbers on the stack.
The isStandard() checks specify that only standard transactions are allowed.
A transaction is rejected if there is already a matching transaction in the pool or in a block in the main branch.
The transaction will be rejected if the referenced output for each input exists in any other transaction in the pool.
Key Points to Remember
- Transaction verification This verification process is performed by Bitcoin nodes.
- The following is described in the Bitcoin developer guide: 1.
- Check the syntax and ensure that the syntax and data structure of the transaction conforms to the rules provided by the protocol.
- Check whether the size in bytes is less than the maximum block size.
Going Deeper: Advanced Concepts
For each input, there must exist a referenced output unspent transaction.
For each input, if the referenced output transaction is the coinbase, it must have at least 100 confirmations; otherwise, the transaction will be rejected.
For each input, if the referenced output does not exist or has been spent already, the transaction will be rejected.
Using the referenced output transactions to get input values, verify that each input value, as well as the sum, is in the allowed range of 0-21 million BTC.
Conclusion
Transaction verification represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.