Coinbase Transaction
The first transaction in every Bitcoin block that creates new BTC (the block subsidy) and collects all transaction fees for the miner.
What is a Coinbase Transaction?
The coinbase transaction is the very first transaction in every Bitcoin block. It is unique because it has no inputs -- it creates new bitcoin out of thin air. This is the mechanism through which new BTC enters circulation. The coinbase transaction also collects all transaction fees from every other transaction included in that block.
How the Coinbase Transaction Works
- When a miner (or pool) constructs a new block template, the coinbase transaction is created first
- The output amount equals the block subsidy (currently 3.125 BTC) plus the sum of all transaction fees in the block
- The output address is set to the miner's or pool's wallet address
- The coinbase transaction includes a special input field called the "coinbase" where miners can embed arbitrary data
The coinbase data field is famous for Satoshi Nakamoto's message in the genesis block: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks." Mining pools typically use this field to identify themselves and include extra nonce space for mining.
Coinbase Transaction and Mining Pools
In pool mining, the coinbase transaction pays out to the pool's address. The pool then distributes funds to individual miners according to the pool's payout method (FPPS, PPLNS, PPS+, etc.). This is why miners do not receive BTC directly from blocks -- the pool acts as an intermediary, collecting all block rewards via the coinbase transaction and redistributing them.
Maturation Period
Coinbase transaction outputs cannot be spent until 100 additional blocks have been mined on top of the block containing them. This 100-block maturation period (approximately 16.5 hours) exists to prevent issues if the block is orphaned or reorganized. Miners and pools must wait this period before the newly minted BTC becomes spendable.
Coinbase vs Coinbase the Company
The coinbase transaction in Bitcoin is unrelated to Coinbase, the cryptocurrency exchange company. The company was named after this Bitcoin protocol concept, but they are completely separate things. In mining contexts, "coinbase" always refers to the first transaction in a block.