As I understand it a miner gets a reward of 25 BTC per block he finds (as of now). I also read that some transaction fees go to the miner who found the block.

How are these two things related?

Also, how can a miner not claim all the fees? Ain't that automatic? Is there something the miner needs to do after he found the block to claim the fee?

How was the system "boostrapped" with the first block ever?

  • Sorry I am not answering question and asking more related question: "A new block is constructed using transactions from the queue of pending transactions" where the queue held? how the transaction is constructed? I understand there is no centre governing body of Bitcoin, would it mean all the computers in the world would need to update to the same data? "Each block contains a coinbase address..." what is a coinbase address?
    – KFLee
    Dec 14, 2013 at 16:43
  • I suggest you create a new question... This is not a forum and hence you aren't supposed to use "answers" to ask questions in here. So ask a new question and people will answer you there.
    – user10785
    Dec 14, 2013 at 17:30

1 Answer 1


A new block is constructed using transactions from the queue of pending transactions. The miner repeatedly hashes the data until the result meets the network difficulty level. The local bitcoin node then broadcasts the block to the network. The process then repeats with the next set of pending transactions.

The miner gets the block fee as well as all transaction fees for the transactions included in the block. Note that the miner receives nothing if the block is orphaned because another miner broadcast his block first. In the case of a pool, the fees are divided among all of the miners in the pool.

Each block contains a coinbase address and this is the address that receives the fees. The miner can set this address to anything he wants.

Satoshi started the process by releasing the genesis block, which is the initial block in the block chain.

  • +1... thanks a lot. Is the block "complete" once it is broadcasted or can that block still be modified later on?
    – user10785
    Dec 14, 2013 at 1:18
  • erf, cannot upvote, need 15 rep...
    – user10785
    Dec 14, 2013 at 1:18
  • 1
    Once a block has been announced to the world, complete with a valid hash and all, it's unmodifiable. What can happen (and does happen occassionally) is the block gets orphaned - sometimes a whole chain gets orphaned because another miner or group of miners created a longer chain of blocks that excluded said block(s) - in which case it's as though these orphaned blocks had never been created.
    – Joe Pineda
    Dec 14, 2013 at 1:22

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