Coinbase Transaction

A transaction executed on a well-known cryptocurrency exchange platform.

A coinbase transaction, often misunderstood as a trade on the Coinbase exchange, actually refers to a distinct type of bitcoin transaction.

Specifically, it is the very first transaction in a new block, created solely by the Bitcoin miner. Its purpose is to receive the newly minted bitcoins, as well as any associated mining fees.

Unlike regular transactions, a coinbase transaction does not have any inputs since the coins are generated by the Bitcoin protocol itself.

Miners have the flexibility to choose whether the block reward and fees will be sent to a single bitcoin address or distributed across multiple addresses.

Interestingly, the initial coinbase transaction from the genesis block cannot be spent, and the exact reason for this remains unknown. While it is visible in the blockchain, the bitcoins within it cannot be utilized.

To enter circulation, bitcoins from a coinbase transaction must accumulate 100 confirmations in the blockchain, which typically takes approximately 16 hours and 40 minutes.

If you are considering venturing into bitcoin mining, it is crucial to be aware of these aspects.