Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

What does the first transaction in a new block show?

1. A payment to the miner for validating transactions.

2. A payment from one person to another.

3. A payment to a node for relaying transactions.

4. A payment by the node to the miner.

The correct answer is: A payment to the miner for validating transactions.

The first transaction in a new block typically represents a payment to the miner as a reward for validating and confirming the transactions within that block. This payment is known as the block reward and is an incentive for miners to engage in the resource-intensive process of mining. When a block is successfully mined, the miner receives this reward, which consists of a fixed amount of the cryptocurrency being mined (for example, Bitcoin) as well as any transaction fees included in the transactions that are part of the block. This mechanism is essential for the functioning of many cryptocurrencies, as it not only secures the network but also helps to introduce new coins into circulation. The reward structure encourages miners to contribute their computational power to process and verify transactions, ensuring the integrity and security of the blockchain. In contrast, the other options do not accurately describe the role of the first transaction in a new block. Payments between individuals or transactions involving nodes do not represent the miner's compensation for their work in validating the block. Thus, understanding the significance of the first transaction as a reward for miners is crucial in grasping the incentives built into cryptocurrency systems.