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Author Topic: Who really gets the transaction fees?  (Read 604 times)
ratty (OP)
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September 11, 2013, 05:22:32 AM
 #1

I've been looking for an answer to this, and after a lot of searching, just can't find it.
Everyone says the "miner" gets the fee, but how does that work? I've mined a lot of coins, by using pools, how much of that revenue is from transaction fees? Or would I have to mine for blocks on my own without a pool to see it?
Or if it really goes to the miner, does that mean it goes to whoever discovered that block, forever and ever everytime that block is used for more transactions?
Supposedly when all the coins have been mined, and theres no more to be made, people will still mine for coins for the fees, but again, how do you actually get paid for processing transactions?
I would really rather just help with that part of the network processing, to keep the network healthy, than just trying to make money out of nothing, can I use some software to ONLY help with transactions and not mine for new blocks?
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September 11, 2013, 05:31:22 AM
 #2

If a pool mines the block then it is up to the pool to decide how to distribute the fees (different pools have different policies).

Most (if not all) clients help the network by passing new tx's between each other so just by running one of the clients recommended at bitcoin.org then you are in fact already helping. Smiley

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ratty (OP)
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September 12, 2013, 04:33:34 AM
 #3

Ahh, thanks for the answer, I was close! So if you were to mine a block on your own, you get fees for anyone that uses that block each time something is tacked onto it?
I didn't think that people that pass traffic around the network would go uncompensated, but as long there's enough nice people to run the mainline client or bitcoind for free, I guess we'll be ok.
Again, thanks for the answer!
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September 12, 2013, 04:41:54 AM
 #4

So if you were to mine a block on your own, you get fees for anyone that uses that block each time something is tacked onto it?

If you are lucky enough to be able to mine a block (no small feat on your own nowadays) then any fees from the tx's that you decide to place into that block are yours to use in the "coinbase" output (which is <= block reward + tx. fees).

Consider the following rather famous block: https://blockchain.info/block/000000000000034a7dedef4a161fa058a2d67a173a90155f3a2fe6fc132e0ebf

You'll notice that the first transaction's "inputs" says "No Inputs (Newly Generated Coins)" which is what is meant by "coinbase" and you'll notice that the output amount is 50.635175 BTC as the block reward back then was 50 BTC and the tx fees added a further 0.635175 BTC.

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ratty (OP)
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September 12, 2013, 04:51:45 AM
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And how would that lucky miner (or pool now days) actually get the bits? Can the block act as kind of a wallet that the miner can use to get the bits out of it?

One last thing, is there a place I could have read this? Everything I read about mining talks about joining pools, and while I realize that is the smart thing to do, I was curious about how miners actually get the coins. The typical end user doesn't need to know this, so its not usually in FAQs.
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September 12, 2013, 04:55:39 AM
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And how would that lucky miner (or pool now days) actually get the bits?

Again - click on the link I provided and you can *see yourself* that 50.635175 BTC was sent to 1MdYC22Gmjp2ejVPCxyYjFyWbQCYTGhGq8 - this address *is* the miner's own address (i.e. the miner includes their own "payout" as the special "coinbase" tx in the block).

Penny dropped yet?

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ratty (OP)
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September 12, 2013, 08:44:45 AM
 #7

Yes, thanks. I did click on the link, but it didn't click until you spelled it out.
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September 12, 2013, 10:29:49 AM
 #8

Yes, thanks. I did click on the link, but it didn't click until you spelled it out.

Admittedly it isn't how perhaps most people think it might work but once you *get* the whole UTXO thing then it becomes obvious how "coinbase" works and also why you need *change* addresses.

I'd be pretty sure that all this information is in the Wiki (apart from the specific example I used) but I haven't checked whether it is presented in a clear and concise manner.

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