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How bitcoin miners collect their reward? | How miners send mining reward in their digital wallet? - YouTube

Channel: codebasics

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I made a video on bitcoin mining in 15

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lines of python code and I received

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many questions same questions such as

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what do you do after you get a new hash

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how do you exactly redeem your reward so

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in this video I am going to tell you how

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bitcoin miners

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redeem their reward and transfer those

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bitcoins to

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their digital wallet. Now this particular

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video is a prerequisite

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so make sure you watch bitcoin mining in

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15 lines of python code

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first and then you jump on to this video.

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also if you don't know what is bitcoin

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then you can

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in YouTube type in what is bitcoin code

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basics and you will find this

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this particular video where I have

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explained bitcoin using a

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simple analogy so you what that and now

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let's start

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this particular topic so in real life

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there are transactions

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happening in bitcoin. Bitcoin is like a

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currency so let's say Rob goes to a

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coffee store

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and he will buy coffee for this

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particular amount

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and then let's say it's my brother's

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birthday I give him

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five bitcoin as a birthday gift and Jim

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bought

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two bitcoin from coinbase so there are

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people throughout the world making all

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these transactions

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in bitcoin and these transactions go to

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an area called transaction buffer

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or a mempool and these are unconfirmed

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transaction which means

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these are not added to your blockchain

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yet

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and the job of bitcoin miners

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is to produce valid blocks. So there are

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popular bitcoin miners such as f to pull

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and pull slush and so on and they will

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be looking at this transaction buffer or

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listening to this transaction buffer

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get the block of transactions you know

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2 megabyte or that there is a block

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limit so

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they get certain amount of transaction

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and they start

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mining it you know they start

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producing that hash

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which I discussed in my previous video

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and let's say f to pull is the first one

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who can

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you know who can come up with the valid

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block.

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It's possible that other miners might

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come up with the valid block

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but this is a game of who gets lucky

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as well as who is fast. You know so it's

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a combination of those two factors but

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in this scenario let's say f to pull

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comes up with the

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valid hash and that has gets added to

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our official blockchain. Now let's go

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little into detail on how this

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particular block is mined this is what I

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covered in my last video

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but basically let's see if I'm f to

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pull

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I will collect all these transactions

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from the transaction buffer

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so this particular block is transactions

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and it will have a previous hash as well

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now this is the first

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block so previous hash is zero but usually

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you

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only have a block so you get a previous

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hash and then you produce

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the sha 256 or a hash for the entire

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block

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in this green particular rectangle.

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So whatever content you see in this

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great green rectangle

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we make a hash out of it and let's say

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hash is 0 45

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whatever. Now if you notice

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the transactions carefully very

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important is this yellow transaction

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so at the end of the transactions at the

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end of the block

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the miner will add a transaction to

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himself or herself saying that reward me

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6.25 bitcoin. So as of 2021

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April the reward for mining one block is

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625 bitcoin.

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so the miner will add a transaction to

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himself or herself

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in that block itself so it's not like

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you're mining and then later on someone

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transfers you the money.

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As part of the mining process itself you

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add

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a reward to yourself in that block and

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then whatever you see in this green box

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you produce hash out of that. So now

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you all know that you know it's a

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guessing game so you have nonce is equal

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to 1.

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then you put nonce is equal to 2.

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you

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keep on trying this it's a trial and

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error you keep on trying these nonce

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and eventually let's say for some nonce

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you know this is not non 3 but let's say

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for some

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20 000 or 1 trillion nonce you get

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first four zeros I'm just giving

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hypothetical example

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that if my protocol says that a valid

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hash is the hash which has four leading

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zeros

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then once I get to this hash

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it means I have produced a legitimate

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block which I can add to the blockchain.

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So once

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once I get this I will broadcast in my

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network saying that hey

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I have produced a valid block and the

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other peers will

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add this to the blockchain it becomes

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part of the blockchain

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and when it becomes part of the

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blockchain you already have a reward

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so to answer that question how do you

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redeem the reward

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Well, while you are mining the block

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you have added that transaction that

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reward

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in that block itself. So all you need to

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know

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do now is wait till

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the block gets added to the official

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blockchain.

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And once it is in official blockchain

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you have

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already won that reward so the actual

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blockchain looks like this where

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the last transactions in every block

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is the reward actually okay so here

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let's say

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this block was mined by f to pull the

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other block was mined by a miner called

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slush

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third block was mined by let's say and

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pull so if you look at the whole

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blockchain

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you in every block you will see a

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transaction a reward

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going to a miner.

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Now I'm going to show you a real block

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so if you go to blockchain.com and click

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on explorer

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you will see all the blocks which are

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being mined so let me look at this

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particular block you know this block was

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mined by f to pull

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44 minutes ago and when I open this

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block

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what I see is general block information

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so right now the difficulty so in my

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presentation I said

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the difficulties first four zeros you

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see first four zeros

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first four zeros right in reality the

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difficulty

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is first 20 zero so if you count

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this this is twenty zeros

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so f two pull was able to successfully

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mine this particular block

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with 20 leading zeros okay? and you will

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see

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all let's say this particular block had

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100

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uh how much okay 1091

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transactions and the block reward was

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6.25

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and the fee reward. So there are you know

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transaction fees as well

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so in this one he got block reward of

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625

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and the transaction phase is 0.9111

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whatever. right so

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if you just sum this two numbers so let

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me just

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sum these two numbers

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7.161 so you will see

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7. you see 7.161

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going to f to both so this is f to pulls

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digital wallet

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the the public key so this reward

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went to f2 and you know it's like from

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into

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so in the from it says coinbase newly

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generated coins you see

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newly generated coins and then there are

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rest of the transactions.

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So the hash this particular hash was

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produced including the reward

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transaction.

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So now you get the point and you look at

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other transactions see so many other

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transactions like

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10 pages all right in other transaction

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let's say this transaction. This

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particular address okay

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this particular address stands for 12.42

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bitcoin to you know all these addresses

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so it's like from one to many

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the destination is like many

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many digital wallet addresses. So the

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source address here

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you can see the source address total

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received total sent

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some transaction history and so on

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but this particular transaction is you

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know it's a special transaction. It is

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the transition which I showed you here

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in yellow

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it is how bitcoin

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miners get a reward so I hope that

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clarifies your understanding on how

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exactly miners get the money in their

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wallet

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and if you have any further question

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post in a comment below

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I'm going to make a playlist so the

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playlist link is in the video

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description below so

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go check it out I will be posting many

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