How pending transactions are given to the miners to mine in Ethereum? - blockchain

I need to know about how pending transactions are given to the miner to mine and how they get a reward for each transaction.


Transactions are not given to the miners, instead, miners are given the work for a particular block for which they have to find a hash which is below a certain target (target is computed from difficulty). The work consists of a Header Hash on which the hashing is actually performed. Each full node first creates a block, puts all the transactions in the block computes the state root and other parameters and then creates the work which is then sent to the miners. Once the miner finds a hash which is below the target, the miner then sends the solution back to the node. The node checks for the solution and accepts the block if the solution is correct.
Transaction's reward is the transaction fees which are collected by all the transactions fees from a given block. So, if a miner mines a block with 10 transactions and each transaction of 0.5eth fees then the total fees collected will be 5eth. However, in reality, the transaction fees are calculated by the amount of Gas consumed multiplied by the gas price paid by the sender.
Hope this helps.

Related

Why are polygon transactions being dropped and replaced?

It seems transactions on polygon can get automatically dropped and replaced.
original: 0xa67609bacf51ab83b1989e4097b4147574b4e26399bec636c4cfc5e12dfa2897
replaced: 0xec0d501619b5fc9cde6af41df929eeded252138a49965f15a7598bf2e532e555
What is happening here?
On Ethereum, I believe this can only happy if someone proactively replaces the tx by submitting another with the same nonce and higher gas price. Is that correct?
{"level":"error","message":"Error: transaction was replaced [ See: https://links.ethers.org/v5-errors-TRANSACTION_REPLACED ] (cancelled=true, reason=\"replaced\", replacement={\"hash\":\"0xec0d501619b5fc9cde6af41df929eeded252138a49965f15a7598bf2e532e555\",\"type\":2,\"accessList\":[],\"blockHash\":\"0x252f663dfb64dd82dff77b5e4fbe2073cd77248c5ce8dff1191c87ac22d97cf9\",\"blockNumber\":39285028,\"transactionIndex\":60,\"confirmations\":2,\"from\":\"0x90Be1Ef5EEa48f1d33e2574a73E50D208bB3680E\",\"gasPrice\":{\"type\":\"BigNumber\",\"hex\":\"0x6cdbaaf8e5\"},\"maxPriorityFeePerGas\":{\"type\":\"BigNumber\",\"hex\":\"0x6cdbaaf8e5\"},\"maxFeePerGas\":{\"type\":\"BigNumber\",\"hex\":\"0x6cdbaaf8e5\"},\"gasLimit\":{\"type\":\"BigNumber\",\"hex\":\"0x0186a0\"},\"to\":\"0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174\",\"value\":{\"type\":\"BigNumber\",\"hex\":\"0x00\"},\"nonce\":112,\"data\":\"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\",\"r\":\"0x2503d5645a7620c94678ef0a5de4bca4e03b18943cec0511d58b7e444412b467\",\"s\":\"0x72c2cf739e2bfeb8335faab2c4b87b7b0464c9681a488456fa7c8fe25aef89c6\",\"v\":1,\"creates\":null,\"chainId\":137}, hash=\"0xa67609bacf51ab83b1989e4097b4147574b4e26399bec636c4cfc5e12dfa2897\", receipt={\"to\":\"0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174\",\"from\":\"0x90Be1Ef5EEa48f1d33e2574a73E50D208bB3680E\",\"contractAddress\":null,\"transactionIndex\":60,\"gasUsed\":{\"type\":\"BigNumber\",\"hex\":\"0x0110bc\"},\"logsBloom\":\"0x00000000000000001000000000000000000000000000000000000000000000000000000000000000020000000000000000008000000000000000000200000000000000000000000000000008000000800000000000000000000100000000000000000000000000000000000000000000020000000000000180000010000000000001000000400000000000008000000000008000000000004000000000000000200000000000000000000000000000000004000000000000000000000000004000100002000000000081000000000000000000000000000000100000000000000000008000000000800000000000000000000000000000000000000000100000\",\"blockHash\":\"0x252f663dfb64dd82dff77b5e4fbe2073cd77248c5ce8dff1191c87ac22d97cf9\",\"transactionHash\":\"0xec0d501619b5fc9cde6af41df929eeded252138a49965f15a7598bf2e532e555\",\"logs\":[{\"transactionIndex\":60,\"blockNumber\":39285028,\"transactionHash\":\"0xec0d501619b5fc9cde6af41df929eeded252138a49965f15a7598bf2e532e555\",\"address\":\"0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174\",\"topics\":[\"0x98de503528ee59b575ef0c0a2576a82497bfc029a5685b209e9ec333479b10a5\",\"0x00000000000000000000000090be1ef5eea48f1d33e2574a73e50d208bb3680e\",\"0xc726f5f957d29df36c915d2f2816a5906bdb096a68d79abeb83102359a3c51ef\"],\"data\":\"0x\",\"logIndex\":250,\"blockHash\":\"0x252f663dfb64dd82dff77b5e4fbe2073cd77248c5ce8dff1191c87ac22d97cf9\"},{\"transactionIndex\":60,\"blockNumber\":39285028,\"transactionHash\":\"0xec0d501619b5fc9cde6af41df929eeded252138a49965f15a7598bf2e532e555\",\"address\":\"0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174\",\"topics\":[\"0xddf252ad1be2c89b69c2b068fc378daa952ba7f163c4a11628f55a4df523b3ef\",\"0x00000000000000000000000090be1ef5eea48f1d33e2574a73e50d208bb3680e\",\"0x00000000000000000000000090be1ef5eea48f1d33e2574a73e50d208bb3680e\"],\"data\":\"0x0000000000000000000000000000000000000000000000000000000000002710\",\"logIndex\":251,\"blockHash\":\"0x252f663dfb64dd82dff77b5e4fbe2073cd77248c5ce8dff1191c87ac22d97cf9\"},{\"transactionIndex\":60,\"blockNumber\":39285028,\"transactionHash\":\"0xec0d501619b5fc9cde6af41df929eeded252138a49965f15a7598bf2e532e555\",\"address\":\"0x0000000000000000000000000000000000001010\",\"topics\":[\"0x4dfe1bbbcf077ddc3e01291eea2d5c70c2b422b415d95645b9adcfd678cb1d63\",\"0x0000000000000000000000000000000000000000000000000000000000001010\",\"0x00000000000000000000000090be1ef5eea48f1d33e2574a73e50d208bb3680e\",\"0x000000000000000000000000e7e2cb8c81c10ff191a73fe266788c9ce62ec754\"],\"data\":\"0x00000000000000000000000000000000000000000000000000080d77c3b67cb80000000000000000000000000000000000000000000000003005ebfb86a0d1350000000000000000000000000000000000000000000003ebfb8e3e34e504eca50000000000000000000000000000000000000000000000002ffdde83c2ea547d0000000000000000000000000000000000000000000003ebfb964baca8bb695d\",\"logIndex\":252,\"blockHash\":\"0x252f663dfb64dd82dff77b5e4fbe2073cd77248c5ce8dff1191c87ac22d97cf9\"}],\"blockNumber\":39285028,\"confirmations\":2,\"cumulativeGasUsed\":{\"type\":\"BigNumber\",\"hex\":\"0x8d88d1\"},\"effectiveGasPrice\":{\"type\":\"BigNumber\",\"hex\":\"0x6cdbaaf8e5\"},\"status\":1,\"type\":2,\"byzantium\":true}, code=TRANSACTION_REPLACED, version=providers/5.7.1)"}

On Ethereum, I believe this can only happy if someone proactively replaces the tx by submitting another with the same nonce and higher gas price. Is that correct?
Yes, and the same is possible on Polygon and other EVM chains.
Senders can replace their transactions for multiple reasons. For example, high-frequency trading bots continuously check if their pending transactions are still likely to be profitable - and if the transaction is not going to be profitable, the bot replaces it with another one. Either with new recalculated params that they expect to be profitable or simply with transaction from/to the same address so at least they don't lose any more funds than just the gas fees.
Note: Once you send a transaction, it's impossible to drop it completely from the mempool. That's why it is sent back to the sender address.
Or sometimes transactions are replaced by regular users that specified insufficient gasPrice and want to speed up the transaction by replacing the gas price with a higher value.

Does a Bitcoin block stores the corresponding dollar value of a transaction?

I am asking this question so that I want to easily know how many transactions occurred at a particular Bitcoin price. For example, at the price of $20T per BTC, how many are they?
There could be other ways finding this correlation, but my question is: Does the block stores this dollar value?

It does not.
Each block contains a list of transactions and other metadata such as block number, timestamp when it was mined, etc... But the fiat monetary value is not part of the block, nor a part of a transaction.
You'll also need to define a source of truth for the price. While a specific block was mined on a specific time, the price of Bitcoin at that specific time was slightly different on each exchange.
Example (values are made up):
Block number 500,000 was mined on 2022-01-01 00:00:00.
At this exact time, the highest bid on Binance was $19,990, the lowest ask on Binance was $20,000, the highest bid on Coinbase was $20,050, the lowest ask on Coinbase was $20,070, etc.
Exchanges and aggregation services (such as Coinmarketcap) often offer some average prices through their API for a specified timeframe. But there's no "one price of Bitcoin at a specified time".

UTXO MODEL in Bitcoin

Well i have some questions regarding the UTXO model -
1) How is it decided how many transactions will a block contain? Are these transactions related in any sorts?
2) Where are the details of sender and recipient of a transactions stored? If they are not stored, how is it decided where to transfer bitcoins?

1) Miners will usually fill the next block with as many of the highest paying (by fee rate, satoshis/kb) valid (not spent already and pass validation checks) transactions as they can. That way they maximize the transaction fee that they are paid if they win the block reward. There is a limit to the number of bytes a block can contain and it is calculated based on a maximum block weight of 1M virtual bytes, see Weight Units, and is theoretically slightly less than 4MB.
2) They are stored in the transactions which are stored in the blocks. By details all that is stored is the scripts, for the sender, the input script (previous output's scriptPubKey and scriptSig), and for the receiver, the output script (scriptPubKey). See Transaction for more detail.

1> Transactions are broadcasted by anyone in the system and at random intervals. Which transactions, of all the ones broadcasted, are included is very dependent on the miner, as he/she is the one who groups them up and includes them in the block. As Nate noted below, there is also a 1MB block size limit which limits how many transactions can be included in a block. This limit is to prevent huge blocks that clog the network and may be removed if the number of transactions in the network ever grows such that the limit is a serious factor.
2> Sender and recipient transactions are stored in the Blockchain Blocks.Transaction data includes scripts used to spend cryptocurrency amounts listed in the transaction data. The most common of these scripts specify what is commonly called an "address" but that is derived from a public key and is nowadays usually unique to a transaction. It is designed to be difficult or impossible to identify a sender or recipient from these "addresses".
If it is not stored then the transaction will not happen.

Does the transaction fees of a blockchain increase only after the total size of transactions exceed the block size limit?

I understand that the smaller the block size limit the higher the transaction fees may get as users compete for the privilege of their transaction been included in the block.
But before the limit is reached it makes sense to me that no competition is needed as all transactions fit in the block, or am I missing something?

You are understanding it right.
The motive of the high transaction fee is to get the transaction confirmed quickly. If the number of transactions in the Mempool is low(hence no competition), the miners will accept transactions with very low fees as well. The downside is the transaction will take longer to be included in a block.
Even transactions with zero transaction fee can be valid in edge cases. See https://www.reddit.com/r/Bitcoin/comments/72j2cd/0_fee_transaction_finally_got_confirmed_after_43/,
https://bitcoin.stackexchange.com/questions/69030/how-did-these-zero-transaction-fee-transactions-make-it-into-the-bitcoin-network.
The recent versions of bitcoin core require a minimum transaction fee (1000 satoshis at the time of writing). If the transaction fee is lower than that,
it is not relayed.

Block Reward vs. Transaction fee in blockchain

Can Somebody Explain Block Reward vs. Transaction fee?
these are separate benefits that miners receive?
How does it work?

Each block that gets accepted to the main chain results in generation of new coins, or in other words a Block Reward to the miner to compensate them for the effort they have put in mining the block. Currently this stands at 12.5 coins for every accepted block, and this reward halves after approximately every 210,000 accepted blocks. Check this and this for more info.
On the other hand transaction fees is something that a user pays from their own wallets to a miner, so that their transaction is accepted faster for processing. Check this for more info.