Bitcoin Block Headers
  • Version:
    • Version 2: Height in Coinbase Input Script (BIP34)
    • Version 3: Strict DER (BIP66)
    • Version 4: CLTV support (BIP65)
  • Merkle Root:
    • Commits all transactions and their order.
  • Timestamp:
    • POSIX time:
    • Must be higher than median of previous 11 blocks
    • Cannot more than 2hrs higher than local peer clock
  • Difficulty Bits:
    • Defines target for POW
    • Block hash must be below target
  • Nonce:
    • Iterated for POW
  • Block Hash:
    • Double sha256 of serialised 80B header
Genesis Block
  • Block header:
    • No previous block hash.
    • Timestamp:
      • 6:15:05 PM, Jan 3rd, 2009
    • Difficulty bits:
      • Lowest accepted difficulty bits.
  • Transactions:
    • First TX is always coinbase.
    • Coinbase input script:
      • Version 1: Arbitrary data
      • Genesis block:
        • Difficulty bits.
        • Times heading proves block originated afterwards.
    • Difficulty Bits:
      • Lowest accepted difficulty bits.
Difficulty & Target
  • Valid Header Hash must be <= target
  • Miner can iterate following data in block:
    • Nonce.
    • Unused version bits.
    • Timestamp.
    • Coinbase (Merkle Root).
      • Version bits.
      • Input script.
    • Merkle root(TX set/order)
  • Hashes required to achieve target:
    • Example: 0x0800...00: Every 2nd Hash...
    • Example: 0x0400...00: Every 4th Hash...
Difficulty Retargeting
  • Difficulty Adjustment:
    • Every 2016 blocks.
    • Adjusted to maintain 10min block interval.
    • Adjustment maximum bound: 4x.
  • Inflation Bug:
    • Considers interval between 2015 blocks.
    • Slightly faster block/inflation schedule.
    • Requires hardfork to fix.
Coinbase Transaction
  • Single input script:
    • V1: Arbitrary data.
    • Beginning V2: Commits to blockheight (BIP30).
      • Coinbase overwriting (identical txid).
    • Up to 100B total.
  • Output script:
    • Witness block:
      • Witness root and coinbase witness commitment.
      • For witness root: coinbase wtxid = 0x00..00
    • Non-witness block:
      • No output commiting to witness root required.
  • Multiple outputs possible:
    • Fees from transactions.
    • Block subsidy.
Block Size & Weight
  • Transaction Weight (BIP141):
    • Weight equals byte size sum of:
      • 1 x TX serialised (BIP144, with witness).
      • 3 x TX serialised (Pre-BIP144, no witness).
  • Witness Blocks:
    • Maximum weight of 4 Million.
    • Actual data size depends on witness data ratio in block
  • Examples:
    • TX Data 1000B / Witness Data 0B:
      • TX Weight: 1000 + 3000 = 4000
    • TX Data 1000B / Witness Data 500B:
      • TX Weight: 1000 + 1500 = 2500
    • TX Data 1000B / Witness Data 900B:
      • TX Weight: 1000 + 300 = 1300
  • As Witness data size approaches total tx size,
    effective block size approaches 4MB.
Merkle Root
  • Merkle Root:
    • Bitcoin256: dsha256 -> LE Encoding.
    • At each level, duplicate last leaf if uneven.
  • Merkle/Witness Root.
    • TXID leaves -> merkle root (in block header).
    • WTXID leaves -> witness root (in coinbase output)
Block Subsidy
  • Genesis Block:
    • 50 BTC Block Reward
  • Block reward adjustment:
    • Halves every 210,000 blocks/~ 4 years.
    • After 33 halvings, block reward is removed.
  • Block subsidy vs fees
    • As block rewards decrease, and usage increases, fee market emerges for block inclusion.
Chain Organisation
  • Forks:
    • Different valid blocks of equal height.
    • All valid blocks are organised by node.
    • Node follows chain with most POW.
  • Orphan Blocks:
    • Node will request headers/blocks
      from peers to link to main chain.
  • Checkpoints:
    • Forks below checkpoint not organised into chain.
    • Does not contribute to security model.
    • Legacy: Prevent low-difficulty DOS blocks.
      • Resource exhaustion.
    • Currently 13 hardcoded checkpoints.
      • Latest at height 295000.
      • Forks are costly.