Questions about blockchain, mining and rewards

konstantin718

newbie

Activity: 9

Merit: 0

Thanks. Some follow up questions:

So when a miner "solves" the block, he announces it to the network, and then what? All of the other nodes stop mining that block and add it to the blockchain and move on to the next? How does this work exactly? Are nodes in the network mining different blocks?
What is the coinbase transaction?

Thanks!

ScripterRon

full member

Activity: 136

Merit: 120

The block reward goes to the miner or pool that solves the block. If two miners solve blocks at the same time, one of them wins and gets te block reward and the other one loses and gets nothings. The winning block is determined by the number of following blocks built upon it.
The block reward is the same for each block and is currently 25 BTC. The reward is cut in half every 4 years and will eventually go to zero. After that time, the miners will just receive the transaction fees.
If you work out the mathematical progression with the reward halving every 4 years starting at the original reward of 50 BTC, you get 21 million for the total number of bitcoins.
It is up to the miner to include transactions in a block (a valid block can have just the coinbase transaction). This is really no different than the transaction fees for credit card purchases. The difference here is the buyer pays the bitcoin fee while the seller pays the credit card fee.

konstantin718

newbie

Activity: 9

Merit: 0

I'm just trying to wrap my head around the whole process, from what I've read I have a few questions. If you could answer any of them I would be very grateful

For each BTC block that is mined, are the coins awarded to only 1 miner (or mining pool)? Does that mean all other miners that were mining that block lose out?
Is the number of coins awarded for each mined block the same (if so, how many)? Are all blocks "created equal" so to speak?
If the total number of BTC is meant to tend toward 21 million, how will this be achieved. Will the number of BTCs per block decrease, or will the time taken to mine each block increase?
As BTC has become more popular, and more transactions have taken place, does this mean blocks later in the chain will have more transactions "written" into them? Doesn't this mean more computing power is required to verify them?
I have read that a transaction fee is awarded to the BTC miner. This is voluntary, but as the rewards for mining BTCs decrease over time it will become compulsory. How exactly will this be enforced? How can people be coerced into giving part of their transaction to the miner (isn't this akin to taxation?)

Thanks again!

Topic: Questions about blockchain, mining and rewards (Read 440 times)