Blockchain and Transaction Mechanics Flashcards

What is the purpose of the nLockTime field in a Bitcoin transaction?

Answer: It specifies the earliest block height or timestamp at which the transaction can be mined

nLockTime specifies the earliest block height or Unix timestamp before which the transaction cannot be included in a block.

In a Bitcoin transaction, what does the sequence number field on each input control when nLockTime is used?

Answer: Whether the input opts into RBF (Replace-By-Fee)

An input with a sequence number below 0xFFFFFFFE signals RBF opt-in and also allows nLockTime to be enforced.

What is the maximum size of a standard Bitcoin block introduced by the SegWit upgrade (in weight units)?

Answer: 4,000,000 weight units

SegWit replaced the 1 MB byte limit with a 4,000,000 weight unit limit, where witness data is discounted to 1/4 weight.

Which hashing algorithm does Bitcoin use to produce a block's Proof-of-Work?

Answer: SHA-256 applied twice (double-SHA-256)

Bitcoin's Proof-of-Work hashes the block header using double-SHA-256 (SHA-256 applied twice) to find a hash below the target.

What information is stored in the coinbase transaction of a Bitcoin block?

Answer: The block reward plus fees, and an arbitrary data field (up to 100 bytes)

The coinbase transaction creates new bitcoin (block subsidy + fees) and contains an arbitrary data field miners can use for extra nonce space or tagging.

What does UTXO stand for in Bitcoin's transaction model?

Answer: Unspent Transaction Output

UTXO stands for Unspent Transaction Output — the fundamental unit of bitcoin value that has been received but not yet spent.

If a Bitcoin transaction consumes 3 inputs totaling 1.5 BTC and creates 2 outputs totaling 1.48 BTC, what happens to the remaining 0.02 BTC?

Answer: It is collected by the miner as a transaction fee

The difference between input value and output value in a Bitcoin transaction is implicitly claimed by the miner as the transaction fee.