What happens between pressing send and a payment being settled? Step through the six stages, or press play. The animation shows a two-signature company payment.
Step 1 of 6: Prepare
The wallet builds an unsigned transaction: which coins to spend, the receiving address and the fee. In a multisig, it is passed between signers as a PSBT file. Check the receiving address on each signing device screen, not only on the computer.
Source: Bitcoin BIPs: BIP 174: Partially Signed Bitcoin Transaction format (PSBT), Bitcoin developer documentation: Transactions guide: public keys, private keys and signatures.
Step 2 of 6: Sign
Each keyholder approves on their own device. A 2 of 3 multisig needs two signatures. The private keys never leave the devices; only the signatures are added.
Source: Bitcoin BIPs: BIP 11: M of N standard transactions (multisig), Bitcoin developer documentation: Transactions guide: public keys, private keys and signatures.
Step 3 of 6: Broadcast
The fully signed transaction is sent to the network. Nodes check it against the rules and relay it to their peers.
Source: Bitcoin developer documentation: P2P network guide: transaction relay and the memory pool.
Step 4 of 6: Mempool
Valid transactions that are not yet in a block wait in each node's memory pool. Miners tend to pick transactions paying higher fee rates first. Live: loading.
Source: Bitcoin developer documentation: P2P network guide: transaction relay and the memory pool, mempool.space: REST API documentation: block height, hash rate, difficulty adjustment and fee estimates.
Step 5 of 6: Block
A miner includes the transaction in a block and finds a valid proof of work. Other nodes check the block and add it to their copy of the chain. Live: latest block loading.
Source: Bitcoin developer documentation: Block chain guide: proof of work, difficulty every 2,016 blocks, block subsidy, Satoshi Nakamoto: Bitcoin: A Peer-to-Peer Electronic Cash System (white paper, 31 October 2008, PDF).
Step 6 of 6: Confirmations
The transaction now has one confirmation. Each later block adds another and makes it harder to change. There is no bank to reverse it. A company policy can set how many confirmations to wait for before treating a payment as received.
Source: Bitcoin developer documentation: Glossary: one bitcoin equals 100,000,000 satoshis, Bitcoin developer documentation: Transactions guide: public keys, private keys and signatures.
All six steps on one page
Prepare
The wallet builds an unsigned transaction: which coins to spend, the receiving address and the fee. In a multisig, it is passed between signers as a PSBT file. Check the receiving address on each signing device screen, not only on the computer.
Sign
Each keyholder approves on their own device. A 2 of 3 multisig needs two signatures. The private keys never leave the devices; only the signatures are added.
Broadcast
The fully signed transaction is sent to the network. Nodes check it against the rules and relay it to their peers.
Mempool
Valid transactions that are not yet in a block wait in each node's memory pool. Miners tend to pick transactions paying higher fee rates first. Live: see the live panel above.
Block
A miner includes the transaction in a block and finds a valid proof of work. Other nodes check the block and add it to their copy of the chain. Live: latest block see the live panel above.
Confirmations
The transaction now has one confirmation. Each later block adds another and makes it harder to change. There is no bank to reverse it. A company policy can set how many confirmations to wait for before treating a payment as received.
What this means for a treasury policy
Most of the company's controls sit in the first two steps: who prepares a payment, who approves it, and how each signer checks the address on their own device. The policy generator covers approvals, and the security lessons page shows why checking on the device matters.
Sources
Primary sources only. Each link was checked on 29 October 2026. Rules change, so confirm the current version with your adviser.
- Bitcoin BIPsBIP 174: Partially Signed Bitcoin Transaction format (PSBT)
- Bitcoin BIPsBIP 11: M of N standard transactions (multisig)
- Bitcoin developer documentationTransactions guide: public keys, private keys and signatures
- Bitcoin developer documentationP2P network guide: transaction relay and the memory pool
- Bitcoin developer documentationBlock chain guide: proof of work, difficulty every 2,016 blocks, block subsidy
- Bitcoin developer documentationGlossary: one bitcoin equals 100,000,000 satoshis
- Satoshi NakamotoBitcoin: A Peer-to-Peer Electronic Cash System (white paper, 31 October 2008, PDF)
- mempool.spaceREST API documentation: block height, hash rate, difficulty adjustment and fee estimates
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