On or shortly after January 3rd, 2009, the genesis block was mined by the elusive Satoshi Nakamoto. This would be the beginning of the global technological and economic movement that we now know as blockchain technology.
What is a block?
A block is like a file filled with transaction data, timestamps, and other data like the hash.
Concerning proof-of-work blockchains, miners are computers that are setup up to expend energy as a means to secure the network. These miners compete against each other for the block reward, which is usually transaction fees plus some fixed amount of coins.
Once a miner has won a block, it along with all the transactions it contains, gets broadcast to the network. Then the rest of the nodes verify cryptographically that the block is genuine. Once this process is complete, it is permanently added to the blockchain or ledger.
On the bitcoin blockchain, the time between blocks is moderated by something called the difficulty. The network automatically adjusts the difficulty to the total power of all the miners on the network, which creates a consistent average time between blocks of about 10 minutes.
Most cryptocurrencies use blocks even if they have different consensus algorithms. But some, such as IOTA with its tangle technology, do not use this traditional blockchain structure for its ledger.
So, in essence, a block is just a special kind of data structure containing a bundle of transactions that when linked together form the ledger.
The first genesis block
The genesis block is the first block of a blockchain. It is unique in comparison to the other blocks in a blockchain because it usually has a special function or method programmed into the code. This acts as a means to initiate the chain because, in blockchains, the function that creates the next block requires an input hash from the previous block. This, of course, is what actually links the blocks together as each block contains the hash from the previous block thus “chaining” them together. So that is why it’s necessary to hard code the genesis block into the blockchain.
In the first genesis block that Satoshi mined, there was a special message encoded in the block along with the normal data, that message read:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
Speculation on Satoshi’s origin
It’s believed that this was done to help prove it’s that date on which it was created. It is a reference to a headline from the London based newspaper, The Times. Between that and Satoshi’s posting times, use of British English terms like “bloody hard”, it has fuelled speculation that Satoshi is British as opposed to being a Japanese national like his profile on the P2P foundation’s website suggests.
Interestingly, Satoshi mined the first genesis block over the course of about six days. It contained a block reward of 50 bitcoins. However, there is a bug in the code that actually prevents these initial coins from being spent. Also, it’s unclear if this was intentional or not. Not that it would matter to Satoshi given that he earned about 980,000 bitcoins from his mining afterwards.
This reward for mining the block is also called the Coinbase transaction. This happens to be where the popular cryptocurrency exchange, Coinbase, got its name. The Coinbase is the first transaction that the miner puts in the block.
People have been sending a small amount of Bitcoin to the genesis block for years as some kind of homage to the blockchain inventor.
On some blockchains, the genesis block is named “Block 0”, zero instead of one. This is because it’s the common counting convention in virtually all programming languages: start counting from 0 instead of 1 although some blockchains do start with “Block 1”.
Data inside a block
You can view the genesis block and all other blocks of Bitcoin on blockchain.com. There, you’ll see a summary of the information included in that block. Here is some of that information:
Number of Transactions
Fairly straight forward, in the case of Bitcoin, it was only the Coinbase transaction.
Transaction fees
The total amount of fees collected in the block.
Block height
The block height is basically just the block number minus one. It is the total number of blocks between itself and the genesis block. The genesis block of course having a height of 0.
Timestamp
The timestamp is the precise moment the block was created.
Difficulty
How hard it is or the likelihood of discovering the next block hash.
Nonce
The nonce is the random variable used to change the sum of the hash. In other words, it is the lottery ticket that the miners use to see if they won the next block.
Block reward
And of course, we have the block reward, which is the standard reward that is given in every block to the miner. On Bitcoin, and most proof of work blockchains, this is halved every 4 years.
Hash
A hash is the output of a hash function which securely gives a unique output for any given unique input of data. They are designed in such a way as to always provide very different outputs, even if you have two very similar pieces of input data.
