Let’s break down how Bitcoin transactions work using two simple terms:

  • scriptPubKey = locks BTC to someone’s address
  • scriptSig = unlocks BTC with proof of ownership

We'll use Alice and Bob to explain it.

🧾 Step-by-Step: Alice Sends 1 BTC to Bob

1. Alice’s Wallet Finds Her UTXO

  • A UTXO is a coin Alice received earlier.
  • It’s locked using Alice’s public key hash (her address), inside the scriptPubKey.

2. Alice Creates a Transaction

  • She creates a new transaction using that UTXO as input.
  • Her wallet adds a scriptSig:
    • Digital signature (made with her private key)
    • Public key

This proves she owns the UTXO.

3. Alice Locks Output to Bob

  • She adds an output to the transaction with a new scriptPubKey:
    • It contains Bob’s public key hash (Bob’s address)
    • Only Bob can unlock this later

4. The Network Verifies the Transaction

  • Full nodes check:
    • Does Alice’s public key match the original hash?
    • Is the signature valid?
  • ✅ If yes, the transaction is confirmed.

🔄 Summary Table

Part Who Creates It Purpose
scriptSig Alice (sender) Unlocks her UTXO using private key
scriptPubKey Alice (sender) Locks BTC to Bob’s address

🧠 Diagram 

[ Alice's Wallet ]
      │
 Finds UTXO with Alice's pubkey hash
      │
Creates scriptSig (signature + pubkey)
      │
Creates scriptPubKey → locks to Bob's address
      │
Sends Transaction ───► [ Blockchain Node ]
                          │
                  Verifies scriptSig unlocks scriptPubKey
                          │
                     If valid → ✔ Transaction confirmed

This is the core of how Bitcoin ensures secure ownership and transfer of value — no third party needed.