Blockchain Expert, Andreas Antonopoulos, Explains Bitcoin Mining, Rewards and Candidate Blocks
Andreas M. Antonopoulos, a best-selling author, speaker and one of the most globally respected authorities in Bitcoin and blockchain technology, has given a considerably interesting explanation on block rewards and mining as it relates to Bitcoin. This was done in a YouTube video session entitled:
“Bitcoin Q&A: Iterating nonces and the block reward.”
Important Questions And Responses
One of the questions asked of Antonopoulos was about the technicalities regarding the linking of the block reward to a user’s wallet with an ASIC miner. Antonopoulos’ response to the query explained that a candidate block is built by said user with an ASIC miner through the person’s computer as the computer is linked to the ASIC miner.
Explaining this a bit further, Mr. Andreas said:
“Your computer, connected to the ASIC miner, is collecting transactions and blocks from the network. It will construct a candidate block by taking a whole bunch of unconfirmed transactions, stuff them into a block, and then propose it as a new block to the rest of the network.”
Antonopoulos also stated that proof-of-work would be almost compulsory as the candidate block will remain without an audience if there is no Proof-of-Work, stating that no one will be interested unless there’s PoW.
He then said a different transaction in the said block, also generated by the user’s computer, would be included. This transaction would be responsible for giving the mining reward.
Explaining this, he said:
“When you are a miner, your computer creates the candidate block and the coinbase transaction, which is currently a reward of 12.5 bitcoin plus fees from all the transactions in there. Therefore, you decide where that transaction pays to. Your computer [will insert] your destination address… into that candidate block while you are mining.”
He further expounds on this, saying (as he said earlier) that the candidate blocks along with the coinbase transactions would be solely generated by the user’s computer but if the user handles their mining through a mining pool then the process would be concluded by the pool. This process sort of lets miners go about their business and conclude by
“writing cheques to themselves to collect the reward.”
He still does state though, that the said “cheque” could be rendered useless if the block is without Proof-of-Work.
“When a miner [produces] a proof-of-work solution for a block, then they write a cheque to themselves… for 12.5 bitcoin plus fees in the coinbase, which is a valid transaction. If that block is accepted by the rest of the network, it will show clearly in the blockchain that this miner is being paid their reward […] Everything in the block must be valid.”
One important feature, as stated by Antonopoulos, is that the reward to be received from the transaction will not be spendable until after a hundred blocks have been produced and confirmed. He said this is mandated so that miners would not be able to us
“chain reorganizations to double-spend.”