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What Is a Coinbase Transaction? How Mining Creates New Coins
The coinbase transaction is the first transaction in every block, created by the miner, which has no regular inputs and pays out the block subsidy plus the fees of the block's other transactions.
Key takeaways
- It is the only transaction that creates new coins, up to the subsidy the rules allow.
- It also collects the fees paid by the other transactions in the block.
- In Bitcoin and Litecoin its outputs cannot be spent until 100 blocks later.
- Bitcoin requires the block height to be included in it (BIP-34).
What makes it special
Every block begins with a coinbase transaction. Unlike ordinary transactions, it does not spend earlier outputs; it creates new ones. The miner chooses where those outputs go, usually to their own address or to the pool's payout address. Nodes accept it only if the total does not exceed the subsidy defined by the protocol plus the fees collected in that block.
Subsidy and fees
The subsidy is the newly issued part of the reward, which shrinks at each halving. The fees are paid by senders of the other transactions in the block, and the miner keeps them. Together they are what people call the block reward. This is the only way new coins enter circulation in a proof-of-work chain.
Maturity: why you wait 100 blocks
Coinbase outputs are locked for a while. Bitcoin's developer documentation says a coinbase transaction cannot be spent for at least 100 blocks, and the source code defines the maturity constant as 100 in both Bitcoin Core and Litecoin. The reason is that a block can become stale; if its reward were spendable immediately, coins derived from it could vanish in a reorganisation. Other coins may use different values, so check the chain you mine.
Extra data inside it
The coinbase input has a free-form script area. Miners use it for the extra nonce, for pool tags and, since BIP-34, for the block height. In merge mining, a commitment to the other chains' blocks is also placed here, which is how one hashing effort can count for several chains.
Example
A Litecoin miner finds a block. The coinbase pays the current subsidy plus 0.02 coins in fees from the block's transactions to the pool's address. Those coins show as immature until 100 more blocks are built on top, and only then can the pool spend them.
Put it into practice
Receive mining payouts to keys you hold
Point your pool's payout address at a receive address from Scrypt Wallet so the coins land under a key only you control once the pool pays you.
Create a free wallet Get Scrypt for AndroidFrequently asked questions
Does 'coinbase' mean the exchange Coinbase?
No. The term comes from Bitcoin's protocol and means the transaction that creates new coins in a block. The exchange chose the name later.
Can the miner pay the reward to anyone?
Yes. The miner chooses the output address, which is why pools can pay rewards out to their members.
Why do my mining payouts arrive late?
The block reward matures after a set number of blocks, then the pool pays on its own schedule.
Written by the Scrypt Wallet team · Updated 2026-10-02. General education, not financial, tax or legal advice.