Blockchain Tutorial

Blockchain Tutorial History of Blockchain Blockchain Terminologies Working of Blockchain Blockchain vs DLT Blockchain Versions Smart Contracts Blockchain Applications Cryptography Role of Bitcoin Miners Blockchain Hash Function Bitcoin Basic Component Blockchain Block Hashing How to Block Hashes Work in Blockchain Blockchain Pow Coinbase Transaction Key Concepts in Bitcoin Key Areas of Blockchain Blockchain Cryptocurrency Blockchain DAO Blockchain Double Spending Blockchain Bitcoin Cash Bitcoin Forks and SegWit Blockchain Merkle Tree Difference between Blockchain and Database Bitcoin Mitigating Attacks Who sets the Bitcoin Price Getting Started with Bitcoin How to choose Bitcoin Wallet Sending and Receiving Bitcoin Converting Bitcoins to Fiat Currency Ethereum 2.0 Blockchain Data Management Steps to become a Blockchain developer Smart Contracts Advantages of Blockchain in healthcare Decentralized Voting System using Blockchain Demur-rage currencies in Blockchain How can Blockchain Technology help IoT to reach its full potential Project Ideas on Blockchain for Professionals Consensus Algorithms in Blockchain Top 10 Blockchain Project Concepts Uses of Blockchain Obtaining Free Test Ethers What does a Blockchain contain What does the IT industry mean by BaaS Top Blockchain Project Ideas for Beginners

Cryptography

Introduction and Features of Cryptography DNA cryptography ECB Mode in Cryptography Elliptic curve in cryptography Format String Vulnerabilities in Cryptography and Network Security Kerberos in Cryptography and Network Security Blowfish Algorithm in Cryptography Data Encryption Standards Feistel Cipher in Cryptography HMAC Algorithm in Cryptography IP Security in Cryptography ElGamal Algorithm ElGamal Cryptosystem What is IDEA Advantages of Cryptography Role of Bitcoin Miners Blockchain Hash Function Blockchain Merkle Tree Blockchain Pow Coinbase Transactions Consensus Algorithms in Blockchain Converting Bitcoins to Fiat Currency Decentralized Voting System using Blockchain Demur-rage currencies in Blockchain Difference between Blockchain and Database Difference between Symmetric and Asymmetric Encryption Ethereum 2.0 Getting Started With Bitcoin How can Blockchain Technology help IoT to reach its full potential? How does Digital Signature Work Advantages of Blockchain in healthcare Basic Component of Bitcoin Bitcoin Forks and SegWit Bitcoin Mitigating Attacks Blockchain Bitcoin Cash Blockchain Block Hashing Blockchain Cryptocurrency Blockchain DAO Blockchain Data Management Blockchain Double Spending What does Blockchain contain? What does the IT industry mean by BaaS (Blockchain as a Service)? Who sets the Bitcoin Price? Working of Block Hashes in Blockchain How to Choose Bitcoin Wallet? Key Areas of Blockchain Key Concepts in Bitcoin Obtaining Free Test Ethers for the Rinkeby Test Network on the Ethereum Blockchain Project Ideas on Blockchain for Professionals Sending and Receiving Bitcoin Top 10 Blockchain Project Concepts Uses of Blockchain What do you need to do to become a Blockchain Developer? Blockchain Technology-Introduction

Coinbase Transaction
2022-05-15 22:05:47

Coinbase Transaction

Several transactions occur on a cryptocurrency network, but these transactions may not be transactions between two people. Some transactions which take place are a bit different from other transactions. & Coinbase is a transaction. The block transaction in Bitcoin was the 1st transaction of the Coinbase. Miners create these types of unique Bitcoin transactions. Miners use these to collect their prizes or reward for the work they have done & some other fees charged by miners are sent through this transaction.

Structure of Coinbase Transaction

Coinbase Transactions

A Bitcoin transaction is also a type of transaction which shows how the Bitcoin moves from one wallet to another. But in Coinbase transactions, it generates or creates new currencies that have never been spent & that's why input remains empty or blank in these types of transactions. The single blank input in the Coinbase transaction is called The Coinbase.

Raw Data

Let us take the example of a Coinbase transaction. The data we are using here doesn't refer to the original transaction. Coinbase transaction credentials are always visible.

Example

0100000001b0ece12b8657b19b8cce9506dedf62f1c582894528756753b255f717b6768c94ffffffff4503ec59062f48616f3254432f53756e204368756e2059753b205a6875616e67205975616e2c2077696c6c20796f75206d61727279206d653f2f06fcc9cacc19c5f278560300ffffffff0112dRugNbdxK39288NjeDV4GX7rMdKCGn6B00000000.

Characteristics of Coinbase Transaction’s

1. Using Cryptocurrency from Coinbase Transaction

The Blockchain, which is earned from Coinbase transactions, can't be used or spent unless & until 200 confirmations is reached in Blockchain. The rewards gained or earned can't be spent unless & until the transaction receives a certain no. of confirmations in Blockchain. For example, if Bitcoin, the no, is 200.

2. The 1st transaction in a new block

The first transaction in a new block is usually the Coinbase transaction. The rewards generated by transactions are sent to multiple or single wallets; it works like cryptocurrency transactions.

3. Halving

The rewards of Coinbase transactions are determined by value. After adding some blocks successfully to Blockchain, rewards generated after adding a block successfully are reduced by fifty per cent. & this is known as halving. This usually occurs in Bitcoin after 21000 blocks are added and successfully mined. The rewards are decreasing day by day. Initially, it was 50 BTC per block; after that, 25 BTC, and now it's 12.5 BTC.

Coinbase Transactions

Transactions executed on the Bitcoin network are grouped to form or create a block. When a block is created, it will be added to Blockchain immediately. These blocks that are added are tamper-proof & immutable for all the transactions done on the Bitcoin network. Each block contains atleast one transaction or usually more than one transaction. & this block which contains transactions is called the coinbase transaction.

Creating the block is the responsibility of the miners. Miners get rewarded (Bitcoin) for their work whenever a new block is added successfully. The Bitcoin block is dependent on the no. of blocks from the genesis block & the fees are included in the transactions of the block. The sum of rewards & fees of transactions from all the transactions that have been in a block is the total no. of rewards that miners get.

Now, the reward is going to be reduced to 6.5 BTC.

Transactions can be only spent if there is a minimum of 100 block confirmations in the Blockchain. & it is an important feature present in the coinbase. So, it can only be spent if at least 100 blocks are confirmed.

Getting the value of the coinbase transactions

  1. The value of each output and each input of transactions are verified by a certain block included.
  2. Halving is always related to block.
  3. In a broader sense, the no. of a transaction in a particular block is considered or the height of that particular block. If the transactions increase, the fees & commission also increase; they are directly proportional to each other.
  4. Last, the miners' job is to create coinbase transactions that include the total no. of rewards & fees. Halving values are almost equal to the rewards generated.
Coinbase Transactions

Some examples from the Bitcoin website show the real coinbase transaction

There are some interesting things about coinbase transactions

1. 1st coinbase transaction

While mining the Bitcoin block in the year 2009, there generated a Bitcoin address and there generated coinbase, which was then sent to that address. But before that itself, the address had 50 BTC but couldn't be spent & the block never got confirmation in the Blockchain.

2. Maturity of coin

A certain no. of confirmations occurs after only a coinbase transaction can be spent.