The Coinbase maturity (maturity) rule determines when the block reward from a coinbase transaction can be spent.
BTC involved in a Coinbase transaction cannot be spent until the block receives at least 100 block confirmations on the blockchain. Unlike normal Bitcoin transactions, which contain data showing the movement of BTC from one wallet to another, coinbase transactions contain data about the creation of a new currency that has not yet been spent.
Therefore, the entry remains blank in these transactions. Therefore, structurally, base coin transactions can also be considered as a single blank entry. The Coinbase maturity rule was put in place to protect the blockchain from bifurcations, which are events that occur when a community decides to make changes to the blockchain’s protocol or set of rules.
What is Fork Prevention in a Coinbase Transaction?
Coinbase helps prevent forks by adding special rules for transactions, creation and verification.
Blockchains like Bitcoin are open source and rely on communities to maintain and improve their code. Therefore, an event such as a fork will cause the chain to split and produce a second blockchain. This blockchain will contain its entire history as it moves in a new direction.
In such a case, a miner can create as many BTC as he wants if the new blockchain does not have a maturity rule, thereby working against Bitcoin’s halving algorithm, which tries to maintain the scarcity of the cryptocurrency.
What is the transaction value and customizable text feature in a Coinbase transaction?
The value of a Coinbase transaction depends on factors such as the value of each transaction, block height, and halving. Miners can add any customizable text to the blocks they create.
The value of a Coinbase transaction is determined by several factors. These include the value of each transaction validated by the block, the height of the block (number of transactions), and the block-by-block halving. Once the block reaches 100 confirmations, the miner can use BTC.
When a block is created, it holds about 100 bytes of data. There is also an allocation for miners to add any text they prefer.
