Calculating the TXID

The Transaction ID (TXID) is the primary key of the Bitcoin ecosystem. Just like a Block Hash, the TXID is a deterministic cryptographic result of the transaction data.

1. The Algorithm

A TXID is calculated by performing a Double-SHA256 hash on the serialized transaction data. $$TXID = SHA256(SHA256(Raw\ Transaction))$$

2. What is Hashed?

For a standard (non-SegWit) transaction, the hash includes:

• Version

• Inputs (TXID, VOUT, ScriptSig, Sequence)

• Outputs (Value, ScriptPubKey)

• Locktime

If you change even a single bit in the signature (ScriptSig) or the recipient's address, the resulting TXID will be completely different.

3. Transaction Malleability

Because the signature is part of the data being hashed for the TXID, a problem called Transaction Malleability once existed.

• An attacker could slightly modify a signature without making it invalid.

• This would result in a different TXID.

• This made Layer 2 protocols (like Lightning) difficult to build because they relied on fixed TXIDs.

• SegWit solved this by moving the signatures (Witness) to a separate area that is not included in the primary TXID.

4. Big-Endian vs. Little-Endian

Similar to block hashes, TXIDs are displayed in Big-Endian by block explorers but processed in Little-Endian by the protocol.

• Explorer TXID: 4a5e1e...

• Protocol TXID: ...1e5e4a

Step	Action
1. Serialize	Convert the TX fields into a raw byte stream.
2. Hash	Apply SHA256 twice.
3. Finalize	The resulting 32 bytes is the internal TXID.

In the next section, we will discuss how nodes use the TXID to reference spendability.