What is Coinbase (Mining)?
Let's find out Coinbase (Mining) meaning, definition in crypto, what is Coinbase (Mining), and all other detailed facts.
Coinbase is a term only applicable to mineable cryptocurrencies like Bitcoin (BTC). Mineable cryptocurrencies require users to contribute computational resources and create new data blocks to expand the blockchain. Miners collect transaction data that builds up in a block. The blocks are then secured using cryptographic hashes and added to the end of the chain.
The mining process requires high electricity resources and specialized equipment. Users who engage in the mining process receive rewards for every new block. These rewards are the newly mined coins, referred to as coinbase, and the transaction is known as the generation transaction.
Some cryptocurrencies like Bitcoin are based on the unspent transaction outputs (UTXO) model. Each transaction is made up of inputs and outputs. The coins that the users have in their wallet addresses are collections of unspent outputs from prior transactions. Therefore, the coinbase is a new input of the generation transaction. The coinbase output is sent to the miner’s wallet.
When Bitcoin was launched, the coinbase was worth 50 BTC. Bitcoin uses the mechanic known as halving, as the reward is getting consistently smaller with every 210,000 blocks added to the blockchain, or roughly every four years. As of February 2022, the Bitcoin coinbase is worth 6.25 BTC and is expected to be halved again by 2024.
Coinbase is also the name of one of the biggest cryptocurrency exchange platforms in the world.