What Is the Coinbase Transaction in a Bitcoin Block?

Every Bitcoin that has ever existed, all 19-plus million of them, entered circulation through exactly the same kind of transaction, repeated block after block for over 15 years. It’s called the coinbase transaction.

A coinbase transaction is the special first transaction in every Bitcoin block, created by the miner who successfully mined that block, which creates new Bitcoin out of nothing and pays it to an address the miner chooses — along with the total transaction fees collected from every other transaction in that block. Unlike every other transaction, it has no inputs, since it isn’t spending any previously existing coins.

This is worth distinguishing clearly from Coinbase the company, a popular cryptocurrency exchange — the terms are unrelated in origin, and the coinbase transaction has existed as core Bitcoin terminology since 2009, well before the exchange existed.

The coinbase transaction also contains a small area called the coinbase field, which miners can fill with essentially arbitrary data. This is where the famous Genesis Block newspaper headline was embedded, and modern miners often use this space to identify their mining pool or add extra randomness to help find a valid block faster.

There’s a specific rule worth knowing: a coinbase transaction’s reward cannot be spent until 100 additional blocks have been mined on top of it. This maturity rule protects against the possibility of an orphaned block — if that block later gets orphaned, the new coins it created would never have existed on the winning chain at all.

Every full node checks this coinbase transaction rule as part of ordinary block validation, ensuring no miner can create more Bitcoin than the protocol’s rules currently allow, regardless of how much hash rate they control.

Want to see exactly how that 100-block maturity rule connects to orphaned blocks? Continue learning in the Bitcoin Academy.