Notes on Bitcoin target representation

Bitcoin has a weired representation for the target encoded into field nBits of each block header

Definition

The target value is the limit that a miner need to find a lower block hash than in a PoW

Remarks

  • The target is set so that a block is mined roughly every 10 minutes
  • The initial target was set as 00000000ffff0000000000000000000000000000000000000000000000000000 or 0x1d00ffff
    which can be checked from here

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Notes on Bitcoin Transactions

A transaction is a transfer of value that is broadcast to the network and collected into blocks by miners.

A transaction typically references a previous transaction output to new transaction inputs. The bitcoin input values are mapped to the bitcoin output values.

Bitcoin uses a counter intuitive UTXO (Unspent transaction output) model unlike traditional accounting models where old coins are destroyed and new coins are created for each transaction.

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