Bitcoin mining is the process of verifying transactions on the blockchain network and adding them to the public ledger. Miners are rewarded with newly minted bitcoins for each block they successfully mine. Coinbase transactions are special transactions that create new bitcoins and reward miners for their efforts. In this article, we will explore the difference between Coinbase transaction inputs and outputs in Bitcoin mining.
Coinbase Transactions
Coinbase transactions are the first transaction in each block and are unique in that they do not reference any previous transaction inputs. Instead, they create new bitcoins that are awarded to the miner who successfully mines the block. The amount of the reward is determined by the current block subsidy, which is set to halve every 210,000 blocks. Currently, the block subsidy is 6.25 BTC per block, but this will be reduced to 3.125 BTC in the next halving event.
The Coinbase transaction contains a special script that allows the miner to claim the block reward. This script is called the coinbase script and is included in the input section of the transaction. The coinbase script is typically composed of a random string of data followed by the miner’s public key or Bitcoin address.
Coinbase Transaction Inputs
The input section of a Coinbase transaction is unique in that it does not reference any previous transaction outputs. Instead, it contains a single input that is created by the miner. This input is called the coinbase and is used to create new bitcoins that are awarded to the miner.
The coinbase input is composed of two parts: the block height and the coinbase script. The block height is a four-byte field that specifies the height of the block in the blockchain. The coinbase script is a variable-length field that contains the miner’s public key or Bitcoin address, along with a random string of data.
The coinbase input is also used to calculate the transaction hash, which is required for the transaction to be included in the blockchain. The transaction hash is calculated by taking the SHA-256 hash of the entire transaction, including the coinbase script.
Coinbase Transaction Outputs
The output section of a Coinbase transaction is similar to that of a regular transaction. It contains one or more transaction outputs that specify the amount of bitcoins to be sent and the recipient’s public key or Bitcoin address. However, unlike regular transactions, the outputs of a Coinbase transaction cannot be spent until they have matured.
Maturity refers to the number of confirmations a block has received since it was mined. Each confirmation represents a new block added to the blockchain, and the more confirmations a block has, the more secure it is considered to be. In Bitcoin, it is generally recommended to wait for at least six confirmations before considering a transaction to be fully confirmed.
The maturity period for Coinbase transaction outputs is set to 100 blocks. This means that the bitcoins created in a Coinbase transaction cannot be spent until 100 blocks have been added to the blockchain following the block in which the transaction was included.
Conclusion
In conclusion, Coinbase transactions are a unique type of transaction that create new bitcoins and reward miners for their efforts. The input section of a Coinbase transaction contains a single input called the coinbase, which is used to create new bitcoins that are awarded to the miner. The output section of a Coinbase transaction contains one or more transaction outputs that specify the amount of bitcoins to be sent and the recipient’s public key or Bitcoin address. However, unlike regular transactions, the outputs of a Coinbase transaction cannot be spent until they have matured. Understanding the difference between Coinbase transaction inputs and outputs is essential for anyone interested in Bitcoin mining or blockchain technology.
