{"id":550325,"date":"2023-02-10T18:50:00","date_gmt":"2023-02-10T15:50:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-is-a-coinbase-transaction\/"},"modified":"2023-02-10T18:50:00","modified_gmt":"2023-02-10T15:50:00","slug":"what-is-a-coinbase-transaction","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/","title":{"rendered":"#What is a coinbase transaction?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a50de6f3d084\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a50de6f3d084\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#%E2%80%9CWhat_is_a_coinbase_transaction%E2%80%9D\" >&#8220;What is a coinbase transaction?&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#What_is_a_transaction_value_and_customizable_text_property_in_a_coinbase_transaction\" >What is a transaction value and customizable text property in a coinbase transaction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#What_is_fork-prevention_in_a_coinbase_transaction\" >What is fork-prevention in a coinbase transaction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#What_is_a_coinbase_maturity_rule\" >What is a coinbase maturity rule<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#What_are_block_rewards_and_Bitcoin_halving\" >What are block rewards and Bitcoin halving<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#How_does_a_coinbase_transaction_work\" >How does a coinbase transaction work<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-coinbase-transaction\/#What_are_coinbase_transactions\" >What are coinbase transactions<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CWhat_is_a_coinbase_transaction%E2%80%9D\"><\/span>&#8220;What is a coinbase transaction?&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p style=\"float:right;margin:0 0 10px 15px;width:240px\"><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy9jY2MwNTZlNTM2YTkzNTdhZDdlNmQ1NzUyMjVkYmVkNi5qcGVn.jpeg\" class=\"type:primaryImage\"><\/p>\n<pre><code>                A coinbase transaction is the first transaction created in each new block, and it has key features that differentiate it from other transactions.\n                &lt;h2&gt;How coinbase transactions are structured&lt;\/h2&gt;&lt;p&gt;\n<\/code><\/pre>\n<p><em>Coinbase transactions are structured as the first transaction in a block, where the miner includes a newly minted amount of BTC as a reward for their effort in solving a complex mathematical problem to validate transactions and create a new block on the blockchain.<\/em><\/p>\n<p>Coinbase transactions have a special format. Compared to a regular transaction input, a coinbase transaction has a different set of values that do not represent unspent transaction output (UTXO).\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" width=\"1450\" height=\"1211\" alt=\"\" src=\"https:\/\/s3.cointelegraph.com\/storage\/uploads\/view\/c61fe999b6d8c9f78c3eec0aafa200ff.png\"><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" width=\"1450\" height=\"1211\" alt=\"\" src=\"https:\/\/s3.cointelegraph.com\/storage\/uploads\/view\/013910c55c52b0eb913f431a57e04fa4.png\"><\/p>\n<p>As such, in place of a transaction hash, a coinbase transaction will have 32 bytes, all set to zero. The output index is also filled with 4 bytes, all set to 0xFF (255 decimal places).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_a_transaction_value_and_customizable_text_property_in_a_coinbase_transaction\"><\/span>What is a transaction value and customizable text property in a coinbase transaction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>The coinbase transaction\u2019s value is based on factors such as each individual transaction\u2019s value, block height, and halving. Miners can add any customizable text to the blocks they have created.<\/em><\/p>\n<p>The value of a coinbase transaction is determined by several factors. These include the value of every transaction validated by the block, the height of the block (number of transactions) and the halving relative to the block. Once the block has reached 100 confirmations, the miner can use the BTC.<\/p>\n<p>When a block is created, it holds <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roximately 100 bytes of data. There is also an allocation for miners to include any text they prefer. Nakamoto, for instance, wrote the following message when they mined Bitcoin\u2019s genesis block:\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" width=\"1450\" height=\"1288\" alt=\"\" src=\"https:\/\/s3.cointelegraph.com\/storage\/uploads\/view\/6f21482c46e73294fe01b12a2b37ab62.png\"><\/p>\n<p>This message is a reference to a headline in the British <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>paper The Times from Jan. 3, 2009, and is often seen as a commentary on the state of the global financial system at the time of Bitcoin\u2019s creation.\u00a0<\/p>\n<p>Nakamoto chose to embed this message in the genesis block to emphasize the need for a decentralized and trustless system of transactions, free from the influence of central authorities and inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>ries.<\/p>\n<p>Moreover, miners can add any information they choose to personalize the block, sending an unalterable message in perpetuity.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_fork-prevention_in_a_coinbase_transaction\"><\/span>What is fork-prevention in a coinbase transaction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>Coinbase transactions help to prevent forks by including special rules for their creation and validation.<\/em><\/p>\n<p>Blockchains like Bitcoin are open-source and rely on communities to maintain and develop their code. As such, an event like a fork will cause the chain to split and produce a second blockchain. This blockchain will contain all of its history while heading off in a new direction.<\/p>\n<p>In such a circumstance, a miner can create as much BTC as they want if the new blockchain does not have the rule of maturity in place, thereby working against Bitcoin\u2019s halving algorithm that seeks to preserve the cryptocurrency\u2019s scarcity.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_a_coinbase_maturity_rule\"><\/span>What is a coinbase maturity rule<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>The coinbase maturity rule governs when the block reward from a coinbase transaction can be spent.\u00a0<\/em><\/p>\n<p>The BTC involved in the coinbase transaction cannot be spent until the block has received at least 100 block confirmations on the blockchain. Unlike regular Bitcoin transactions that contain data showing the movement of BTC from one wallet to another, coinbase transactions contain data concerning the generation of a new currency that has not yet been spent.<\/p>\n<p>For this reason, the input in these transactions remains blank. Structurally, therefore, coinbase transactions can also be thought of as single blank inputs. The maturity rule was put in place to protect the blockchain from forks, which are events that happen when a community decides to implement changes to the blockchain\u2019s protocol or set of rules.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_block_rewards_and_Bitcoin_halving\"><\/span>What are block rewards and Bitcoin halving<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>Block rewards are the rewards received by miners for mining new blocks and adding them to the blockchain. The Bitcoin halving reduces the block reward by 50% approximately every four years.\u00a0<\/em><\/p>\n<p>Miners are responsible for creating blocks on proof-of-work (PoW) blockchains like Bitcoin. In return, they are rewarded with BTC after the successful creation of each block. The block reward depends on two things: the number of fees included in the transactions of each block and the number of blocks from the genesis block.<\/p>\n<p>During the early days of Bitcoin, the block reward was 50 BTC per block, and this reward is included in the coinbase transaction. Due to the Bitcoin halving, however, the block reward is reduced by half after every 210,000 blocks mined. Bitcoin\u2019s halving occurs approximately every four years.<\/p>\n<p>The block subsidy that is distributed by the coinbase transaction is 6.25 BTC per block (per the latest halving). And because coinbase transactions create new coins, it is valid without any inputs, as the BTC it contains is newly created and not previously spent.<\/p>\n<p>For example, the Blockstream coinbase transaction in block 650,000 has no inputs, and the single output is the amount of 6.25 BTC in addition to the miner\u2019s 0.244131 BTC of fees collected.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_does_a_coinbase_transaction_work\"><\/span>How does a coinbase transaction work<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>Coinbase transactions have unique features, including maturity, fork prevention and customizable texts. They also have a different structure than other transactions.<\/em><\/p>\n<p>On the Bitcoin blockchain, all transactions executed on-chain are combined to form one block. When a block is formed, it will immediately be added to the blockchain. These blocks are immutable and tamper-proof owing to the Bitcoin blockchain\u2019s near-perfect code. Each block should contain one or more transactions, the first of which is always called a coinbase transaction.<\/p>\n<p>Here&#8217;s how a coinbase transaction works:<\/p>\n<ul>\n<li>Block creation: To earn the block reward after creating a new block, a miner must first create a coinbase transaction.<\/li>\n<li>Inputs: A coinbase transaction has no inputs, in contrast to a typical transaction, which makes use of inputs from earlier transactions. A coinbase transaction instead generates brand-new coins out of thin air.<\/li>\n<li>Outputs: The coinbase transaction has one or more outputs that list the addresses to which the block reward will be sent. Miners have the option to distribute the block reward to other addresses.<\/li>\n<li>Block reward: The block reward is currently BTC, and it is halved approximately every 210,000 blocks. This reward is paid to the miner who verifies and adds the transactions to the blockchain.<\/li>\n<li>Mining fee: Miners can also include a mining fee in the coinbase transaction, which is paid by the transaction creators to incentivize miners to include their transactions in the next block.<\/li>\n<\/ul>\n<p>A miner can include a coinbase transaction, along with other transactions, in the block they have mined and broadcast that block to the network after creating it. The block is then examined by other miners, and if approved, it is uploaded to the blockchain and paid for by the block reward plus any associated mining fees.<\/p>\n<p>Some key features of coinbase transactions are discussed below.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_coinbase_transactions\"><\/span>What are coinbase transactions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>Not to be confused with the cryptocurrency exchange Coinbase, the term \u201ccoinbase transaction\u201d refers to a particular type of transaction that occurs in every new block of a blockchain.\u00a0<\/em><\/p>\n<p>Coinbase transactions are a key part of the system that blockchains utilize to introduce new currencies that have never been sent into circulation. The first coinbase transaction was generated by Bitcoin\u2019s (BTC) pseudonymous creator, Satoshi Nakamoto, while mining the first genesis block. The coinbase was reportedly paid to the Bitcoin address \u201c1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa\u201d with a value of 50 BTC.<\/p>\n<p>One of the biggest curiosities of the Bitcoin blockchain is that the said block was never confirmed on the blockchain \u2014 something that has puzzled many blockchain scientists and developers.<\/p>\n<p>One theory is that this occurred because the first-ever coinbase transaction was encoded in the genesis block\u2019s source code. And because the entire blockchain is built on this genesis block, the concept of confirmation was not applied to it.<\/p>\n<p>Another theory suggests that Nakamoto designed it this way since, if the genesis block were to get unconfirmed for any reason, it would cause a new blockchain to be built, making the original blockchain obsolete.<\/p>\n<p>The coinbase transaction is also used to reward miners for maintaining the blockchain. They are paid a certain amount of coins for each block they mine. This rewards system creates an incentive for miners and helps keep the blockchain secure by deterring malicious behaviors that could destabilize the network.<\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/explained\/what-is-a-coinbase-transaction\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;What is a coinbase transaction?&#8221; A coinbase transaction is the first transaction created in each new block, and it has key features that differentiate it from other transactions. &lt;h2&gt;How coinbase transactions are structured&lt;\/h2&gt;&lt;p&gt; Coinbase transactions are structured as the first transaction in a block, where the miner includes a newly minted amount of BTC as&#8230;<\/p>\n","protected":false},"author":1,"featured_media":550326,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1024_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy9jY2MwNTZlNTM2YTkzNTdhZDdlNmQ1NzUyMjVkYmVkNi5qcGVn.jpeg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-550325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/550325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=550325"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/550325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/550326"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=550325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=550325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=550325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}