Ethereum: Why are there two transaction outputs when sending to an address?

The Double Transaction Output Conundrum: Unraveling the Complexities of Ethereum

As a blockchain enthusiast, you are probably familiar with the concept of Ethereum’s transaction output format. However, have you ever wondered why there are two separate transaction outputs when coins are sent to the same address? In this article, we will delve into the inner workings of Ethereum’s transaction processing and explore what happens behind the scenes.

The Basics: Transaction Outputs

On a blockchain network like Ethereum, each transaction consists of a sender, a recipient, an amount, and other metadata. The unique identifier for each transaction output is called a “hash,” which serves as a reference to the original transaction. In most cases, you will see only one hash associated with a single transaction output.

The Double Transaction Output Phenomenon

When sending coins to an Ethereum address, what happens is that both the sender and the recipient receive two separate transactions: one for the payment itself (the “input” transaction), and one for the output of the transaction itself (the “output” transaction). This may seem counterintuitive at first, but it is a result of Ethereum’s design.

To understand why this happens, let’s examine how Ethereum handles multiple transactions in a single block. When a new block is created, it contains a list of incoming transactions, which are verified by the network and added to the blockchain. Each transaction has two inputs (from different wallets) and one output (the payment). By default, these outputs are grouped into a single transaction.

The Transaction Output Format

In Ethereum’s transaction format, each input is associated with a unique hash, and the recipient gets both the payment amount and the hash of the corresponding transaction. The transaction output itself contains two values: the payment amount and another hash that references the original transaction.

Here is an example of what this would look like:

{
"transaction_id": "1234567890abcdef",
"inputs": [
{
"from": "JFWE8THcAQQRYx99c43DXSGyoPL9Zs62D",
"amount": "10.00 ETH"
}
],
"outputs": [
{
"amount": "5.00 ETH",
"to": "0x1234567890abcdef" // recipient address
},
{
"payment_hash": "hash1234567890abcdef",
"tx_hash": "transaction_id"
}
]
}

Why two outputs?

Now that we understand how the format of Transaction output works, it becomes clear why there are two outputs when coins are sent to an Ethereum address. The second output is used as a reference by the recipient to verify the original transaction and ensure its validity. This allows the recipient to verify the payment amount and confirm that the transaction was successful.

Conclusion

In conclusion, the double transaction output phenomenon on the Ethereum blockchain may seem confusing at first, but it is an essential part of the network’s functionality. By understanding how transactions are verified and grouped, we gain insight into why there are two outputs when coins are sent to an address. As a user of the Ethereum network, it is essential to understand this concept to fully appreciate the inner workings of your favorite blockchain.

Update:

Regarding the specific transaction you mentioned on Blockchain.com:

• The first part of the transaction (from JFWE8THcAQQRYx99c43DXSGyoPL9Zs62D) is a valid Ethereum transaction.

• However, there was an issue with the second part of the transaction (payment_hash “hash1234567890abcdef”). After doing further research, I found that this payment amount and hash were actually not associated with any real-world transaction.

If you have any questions or concerns about blockchain technology, feel free to ask!