FAQ: How do we know if a blockchain transaction is valid?

4 premise to check for transaction validity

  • First, if the consumed coins are valid, that is they really were created in previous transactions. 
  • Second, that the consumed coins were not already consumed in some previous transaction, this is not a double-spend.
  • Third, that the total value of the coins that come out of this transaction is equal to the total value of the coins that went in. 
  • And finally that the transaction is validly signed by the owners of all of the consumed coins.