In Satoshi Nakamoto's diagram:

enter image description here

I see a Hash in each transaction block. It would be interesting to see the first block in the chain--it isn't shown. I say that because I do not see anything that references a digital coin. Presumably, if I were to go back to the original transaction block (let's assume that it's a coinbase transaction--one that received, say, 25 bitcoin from a mining effort)--is the Hash for that first transaction block simply a bitcoin address hashed with the next owner's public key? If my newbie question is too off-base, then my real question is: Where is the coin in the diagram above (I understand that coin transactions result from inputs and outputs, but to keep things simple, the "coin" I'm referring to would have only one input and one output--I am trying to track a single digital asset using the diagram above, so it's okay to abstract the "coin" into a single hash for the sake of explanation)? Is the "Hash" effectively the "coin"--and to see the original coin's address, you would need to see the first block in this transaction hash chain--is that correct?

2 Answers 2


Where is the coin in the diagram above

Nowhere really.

The "Transaction" part contains information about the movement of coins (or rather of fractional values). It doesn't really contain a coin.

To work out where the coins are (notionally), you read all the transactions in all the blocks since the first one and see at which addresses everything ended up.

It's like the paper pages of an accounting-book that keeps track of the movement of conch shells, except there are no actual conch shells. Certainly you won't find any conch shells in the accounting book. Bitcoins are imaginary conch shells - they don't actually exist anywhere¹.


No actual gold coins to be found in between the pages of this ledger


  1. Also true of USD really. Greenbacks are just pieces of paper that are part of a distributed accounting system.

Where is the coin in the diagram above

Any way you slice it, this is a confusing diagram. Part of the problem is the direction of arrows, which follows data flow rather than traversability.

As the white paper points out, a coin is "a chain of digital signatures." In other words, a coin is composed of all of the transactions forming a continuous chain of ownership. Given that a transaction can actually have multiple inputs and outputs, we should more accurately talk about a directed acyclic graph (DAG) of ownership.

The face value of a coin is given by the value of the last transaction's output (a UTXO). Unfortunately, outputs are not directly depicted by the diagram. If they were, the concept of an electronic coin would have been more clear.

Taking these caveats into account, if I had to use the diagram to describe a coin, I'd say that the entire diagram (in addition to the implicit remaining transactions in the chain to the left) makes up a single coin.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.