Bitcoin transactions in action

Part of Module 2 of Bitcoin Diploma →

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Activity TypeRole-playSimulation
Duration20–30 min
Description

Participants use transaction notes, tokens, and a classroom ledger. The sender creates and authorizes a simulated transaction. Nodes check the model's stated rules. A miner places a valid transaction into a candidate classroom block. Dice represent repeated attempts to find proof of work, not node validation or a method for choosing valid transactions.

Objectives
  • Participants compare the roles of a sender, recipient, node, and miner in a simplified Bitcoin transaction model.
Materials
  • Transaction notes.
  • Tokens or coins.
  • A classroom ledger table.
  • One die.

Setup

Assign roles. Explain that a recipient can provide a destination and check for a payment, but does not approve a transaction for the network. Nodes validate transactions and blocks against the stated rules. A miner can build a candidate block from valid transactions and tries proof of work. The educator decides which valid model transactions are available to the miner.

Procedure

Step 1: Create and check a transaction

The sender writes a simulated amount and recipient on a transaction note, then authorizes it. The recipient checks the intended amount and destination. Nodes check the model's signature, balance, and double-spend rules.

Step 2: Build a candidate block

When nodes accept the transaction in the model, the miner adds it to a candidate classroom block. The miner rolls the die until the educator's stated result is reached. Explain that the die represents repeated proof-of-work attempts, not a vote or transaction-validation step.

Step 3: Validate the classroom block

The nodes check that the candidate classroom block follows the model's rules, including the valid transaction and the stated die result. Update the classroom ledger only after this check.

Key Points

  1. A sender authorizes a transaction. A recipient checks whether a payment arrived, but does not decide network validity.
  2. Nodes independently validate transactions and blocks against Bitcoin's rules.
  3. Miners can choose transactions for candidate blocks and attempt proof of work. Nodes decide whether to accept the resulting block.
  4. A confirmed transaction appears in a block that a node accepts. It is difficult to reverse through the protocol, but confirmation is not an absolute guarantee for every situation.

Discussion Questions

  1. Which role authorizes the transaction?
  2. Which role checks the stated transaction rules?
  3. What does the die represent, and what does it not represent?
  4. Which parts of the classroom model differ from Bitcoin's actual network?

Notes

Bitcoin uses digital signatures, transaction rules, peer-to-peer communication, proof of work, and independent node validation. The classroom model shows only selected roles and checks.

Bitcoin Diploma assessment link: May provide the individual-response context for T2 / C2. Use the approved protocol and record an individual explanation of validation and double spending; otherwise, this activity is formative.