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Author Topic: How are Transactions Selected to Be in Blocks?  (Read 423 times)
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March 17, 2013, 08:29:52 PM

I have been following Bitcoin for a while and understand a lot of it pretty well, but I was explaining it to my friend in detail, and I really wasn't sure how or where transactions are put into blocks?  Where is on the network is this organized and where does it happen?
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If you want to walk on water, get out of the boat

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March 17, 2013, 08:33:52 PM

Miners decide wich transactions put in the blocks they find
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Gerald Davis

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March 17, 2013, 08:37:24 PM

Transactions exist outside blocks.  When you submit a tx to the network it means you submit it to your peers who submit it to their peers who .... every peer on the network is aware of the tx.  All peers have a pool of unconfirmed tx which is called the memory pool.  Miners choose which tx (if any) to take from the memory pool and put in the next block.  When a block is solved it is relayed peer to peer and each peer removes from the memory pool all the tx which are in the block.

So at all times all peers have
a) the blockchain = permanent record of all confirmed transactions
b) the memory pool = collection of unconfirmed tx the peer is aware of
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March 17, 2013, 09:19:51 PM

As they mentioned the way they usually pick which txn's to chose is which will give them the most fees for the work involved. So usually txn's with a lower size/fee ratio will get process first and txns with a high ratio (low fees for large trxn) will take longer, if they get processed at all.
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