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Fund flow / Illustrated lesson

Following Bitcoin outputs
Follow the exact output before choosing an allocation.

A Bitcoin input references a previous transaction output. That spend relationship is explicit. Assigning value from several inputs to particular outputs requires an allocation assumption.

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  1. 01

    Identify the transaction output

  2. 02

    Find the input that spends it

  3. 03

    Compare the new outputs

Illustrative sequence. This diagram is a teaching aid, not a captured transaction.

What to collect

  1. Transaction hash and output index
  2. Spending input reference
  3. Allocation rule if value is apportioned
Before drawing a conclusion

FIFO and proportional allocation are models, not proof of ownership or an objectively exact taint percentage.

Test the idea

A transaction combines two inputs. Does the first output necessarily belong to the first input’s owner?

Reveal the explanation

No. The spend links are recorded, but that ownership and allocation claim is not established by ordering alone.

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