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I'm very new to Bitcoin, and in my learning process I came across this site:

https://mempool.observer/

which shows the varying amounts of unconfirmed transactions waiting to be mined. I'm learning that miners are able to choose which transactions they process, and that the fee rate is part of the consideration.

My question: what information do miners have access to about a transaction in deciding which to process?

Is it only the fee rate? Can they see the amount of the transaction? Can they see anything about the two parties? (Not their identities I'm sure, but maybe what type of entity is buying or selling - like institution vs. individual?).

Thanks in advance.

2 Answers 2

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Transactions are fairly compact public statements that get broadcast to the network. Miners can see all the information that everyone else can see, no more and no less.

Transactions contain an input list and an output list which specify the UTXOs that get consumed and created. All the addresses associated with the inputs and outputs are public information, but there is no public identity information associated with addresses beyond that. The fee is calculated from the difference between the sum of inputs and outputs, and with the weight of the transaction, the feerate can be calculated.

There are different types of output scripts, some of which are more likely to be used by enterprises than individuals, but no information about the type of entity is encoded in the transaction.

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  • Thanks very much for that answer! I especially appreciated the link to that additional resource on this topic.
    – 4dcndn
    Oct 29, 2021 at 23:18
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Miners have all the information about a transaction as anyone else looking at the pool of unconfirmed transactions (or the blockchain in case of confirmed transactions).

From the transaction data alone you can know:

  • Number, sizes (monetary amounts) and types of transaction inputs and outputs.
  • Spending scripts of transaction inputs.
  • Optional fields like locktime or replace-by-fee.
  • Transaction fee (given implicitly by the difference of total input and output size).

If the miner is doing any sort of chain analysis, they can try to find out or at least guess some other properties of the transaction, again same as anyone else. They are free to use any of their findings, correct or otherwise, in deciding which transactions to include in their blocks.

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  • Thank you, that is very helpful!
    – 4dcndn
    Oct 29, 2021 at 23:18

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