How Bitcoin Nodes Verify the Signature
Every Bitcoin node independently verifies the transaction. Here is how it works.
Step 1 — Node Receives Transaction
When a node receives a transaction from the network, it begins validation.
Step 2 — Node Extracts Three Things
The node takes:
- •The transaction data
- •The signature
- •The public key
Step 3 — Node Recreates the Transaction Hash
The node independently computes:
Transaction Hash = SHA256(SHA256(transaction data))
Step 4 — Node Runs Signature Verification
The node uses the ECDSA verification algorithm:
Verify(Transaction Hash, Signature, Public Key)
Two outcomes are possible:
Valid signature:
- •Signature matches the public key
- •Transaction is accepted
Invalid signature:
- •Signature does not match
- •Transaction is rejected