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I have been thinking for a while and can't really figure this out..

From my understanding, in Bitcoin network, 'bitcoins' are created when a miner successfully mines a transaction. So this means in order for the network to create a bitcoin, there has to be something to be mined and that something is transaction.

But what I also read, the first transaction was from Satoshi to Hal where Satoshi transferred 10 BTC to Hal. How is the possible since to create 10 BTC, they had to do mining previously which can only be done on previous transaction which makes this transaction not first.. Circular.

Or is it the genesis bitcoin was created without mining? Could be the case, but I am not able to find a reference to that.

  • The first block is the Genesis block which starts with reward which is typically sent somewheres. Must of been sent to Hal. So I guess the transaction came first which was sending the mining reward. The next block required mining. – marshal craft Dec 25 '17 at 7:11
  • ^ this is incorrect. In fact the genesis block coins are not able to be spent. The first transaction was sent to Hal, but I believe that was not until ~block 9. – chytrik Dec 25 '17 at 8:58
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Mining was first, as you say, there had to be bitcoins to transact which must have come from mining blocks. The key is, that blocks can be empty. Most early blocks were. And even some blocks now are mined empty, e.g. this one: https://blockchain.info/block/0000000000000000005afd87cdbb34e8126674766c261619044c4c213286d72b

Blocks always contain a Coinbase transaction which pays the reward to the miner regardless of whether there are any other transactions to mine or not.

The incentive for miners to include other transactions in blocks rather than leave them empty is the transaction fees.

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  • 'Empty block'. That what I needed. And to "blocks always contain a Coinbase transaction', can you put me to a link or elaborate this? Do you mean Coinbase exchange? – Vicyan Dec 25 '17 at 8:30
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    The coinbase transaction in a block refers to the newly minted coins, which are a reward the miner may claim for finding the block. There is also a business called coinbase, but they have no relation beyond the name. – chytrik Dec 25 '17 at 8:57
  • No, coinbase exchange is completely unrelated. bitcoin.stackexchange.com/q/4571/51948 – MeshCollider Dec 25 '17 at 8:58

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