0

Sorry if this question is too basic or if it has somehow been answered before...

My understanding is that any type of Bitcoin block must be first mined, which applies to transaction confirmations, for instance.

However, if each and every block must be obtained from a mining effort, then for each and every block there is a reward (currently) of 6.25 bitcoins.

So for a given transaction, it requires a number of confirmations. If that transaction related to the transfer of 1 bitcoin from one person to another, it would require additional 6 confirmation blocks. Each of those confirmation blocks would have to be first mined. The miners would be granted 6.25 bitcoins for each of the transaction confirmation blocks.

In other words, there would be an exponential growth of bitcoins just for the sake of creating transaction blocks. And those bitcoins would in turn require more blocks so they could be traded/confirmed, which would result in yet more bitcoins granted to the miners.

Can someone please help clarify? Am I missing something rather obvious?

Thanks,

Julius

2 Answers 2

1

One new block is created every 10 minutes on average. The mining difficulty is adjusted to keep this rate constant

The mining reward is halved every 210,000 blocks, about every four years.

These two facts alone determine the amount of spendable Bitcoin available at any moment in time.

The result is that the total amount of spendable Bitcoin converges in a completely predictable way towards 21 million. It cannot exceed that.

Total Bitcoins over time
(Source: Insti, Creative Commons Attribution 3.0)

As the mining reward approaches zero, miners will be rewarded through transaction fees alone.

Each block will typically act as the initial confirmation of several thousands of unrelated transactions directly and as a subsequent confirmation of each of the billions of transactions in the current Bitcoin chain since the beginning of time.

4
  • You stated: "Each block can confirm thousands of transactions." Can a block confirm totally unrelated transactions? Thanks. Commented Nov 24, 2022 at 18:41
  • Yes, normally all transactions in a block are unrelated.
    – bordalix
    Commented Nov 24, 2022 at 19:53
  • @bordalix I'm not sure what you mean with "normally", but it is very much allowed (and not uncommon) for a transaction to spend another unconfirmed transaction, such as is e.g. the case with CPFP.
    – stickies-v
    Commented Nov 25, 2022 at 15:57
  • @stickies-v yes, you're right. With "normally" I meant most of the transactions in a block will be unrelated, which doesn't mean related transactions can't be in the same block.
    – bordalix
    Commented Nov 26, 2022 at 12:47
1

You seem to be under the impression that each block has the purpose of confirming a single transaction or to increase the confirmations on one transaction.

Blocks are found approximately every 10 minutes and may write thousands of transactions into the blockchain. Subsequent blocks further increase the Proof-of-Work heaped on top of those transactions’ confirmations. So, while your transaction only needs to be included in the blockchain once along with many other transactions, the continuous growth of the blockchain increases the probabilistic immutability of your transaction.

You may also find my two answers on "Can someone explain how the Bitcoin Blockchain works?" useful, which provide comprehensive overviews of how transactions and blocks fit together from two different perspectives.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.