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From my understanding, miner's take a bunch of transactions and use a nonce, previous block and the transaction data to try and find a hash that beats the difficulty. As soon as this happens, will their block be added, and then 99 blocks later the BTC will be awarded.

Is the solving aspect of the hash the most expensive part, for the computer? Or is gathering the transactions and confirming them more expensive?

How does one confirm the transactions? Do they have to traverse the entire blockchain, or only find the most recent ledger which shows both user's balances to confirm?

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Is the solving aspect of the hash the most expensive part, for the computer? Or is gathering the transactions and confirming them more expensive?

Finding the nonce that produces the correct hash is by far the most computationally expensive part.

How does one confirm the transactions? Do they have to traverse the entire blockchain, or only find the most recent ledger which shows both user's balances to confirm?

The blockchain is the only bitcoin ledger. One confirms transactions by confirming each of them. To confirm a transaction is valid it must satisfy certain rules. One of these rules is that each of transaction's inputs must be correctly signed.

Transaction's input comes from an output of some previous transactions. Bitcoin node that wants to validate the transaction maintains a list of all unspent previous transactions (this list updates regularly and contains only small part of the blockchain), so it can easily find the output that the current transaction's input points to. The output must be in this list of unspent transaction's. An output has all information to verify respective input's digital signature.

So the node that checks the block, makes the above input verification for each input of each transaction.

  • This was all the information I was looking for, thank you! Is the list you are referring to the Merkle Root I have heard about before? – Childishforlife Dec 1 '17 at 17:51
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    No. It is a list of unspent transactions in entire blockchain. More precisely list of unspent transaction outputs, as transaction can be partially spent (some of its outputs can be spend, but other outputs still 'alive'). You will find a term UTxO that's Unspent Transaction Outputs. Merkle root is related to specific block and all transactions in that block (some of which or all can be already spent). – croraf Dec 1 '17 at 18:24

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