The inputs of a transaction reference outputs of previous transactions. These previous transactions
- must already be present in the block chain, or
- can also be pending transactions?
I don't know if the term pending transactions has some meaning I'm not aware of. In this context, I mean transactions that are not yet in the block chain, but are present in the block containing the new transaction.
Example: A particular block
B contains multiple transactions including a transaction
X and a transaction
Y. The transaction
X references the output(s) of transaction
Y is not yet in the block chain, but it is present in block
B as well. Is this possible since transaction
Y is not yet confirmed?
Note: I'm not using the term unconfirmed transaction because as I understand these are transactions not appearing in any block; and in this case transaction
Y would be in a block, the same block as transaction