What is the difference between an implicit and an explicit transaction in SQL Server?

An explicit transaction is one you deliberately start with BEGIN TRANSACTION and end with COMMIT or ROLLBACK, giving you full control over exactly what statements are grouped together, while by default SQL Server treats each individual statement as its own implicit transaction, automatically committing it immediately if it succeeds without requiring any explicit transaction control statements.

-- Implicit: each statement is automatically its own transaction
UPDATE Orders SET Status = 'Shipped' WHERE OrderId = 1;

-- Explicit: multiple statements grouped together deliberately
BEGIN TRANSACTION;
UPDATE Orders SET Status = 'Shipped' WHERE OrderId = 1;
UPDATE Shipments SET ShippedDate = GETDATE() WHERE OrderId = 1;
COMMIT TRANSACTION;