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A coin is considered mined when its block chain has been sufficiently long, preventing the creation of any blocks since its inception, while the difficulty of generating subsequent blocks is sufficiently high and reward payments have been made to miners. This gives the block chain its resistance to modification and makes previous blocks extremely hard to change. This form of censorship is enforced by the bitcoin protocol and is required for the coin to be considered legitimate. Blocks that are no longer in the longest chain are considered orphan blocks. Orphan blocks may be reintroduced into the longest chain through a process called retargeting.
The creation of a block is a process that involves validating transactions, by solving a complex mathematical problem ("Proof of Work"). Since the first block was introduced, this problem has become progressively more difficult. New blocks are added approximately every ten minutes and require on average 10 minutes for their solution to be accepted. The difficulty is adjusted to make it take longer to solve so that the average of 10 minutes is always satisfied.
This rate, 10 minutes for a single block, is known as the block production time. In the first five years of bitcoin, the average block was found each approximately every 10 minutes, or one block per hour. However, block production has more recently taken ten times that long.
Each block has a cryptographic hash of the previous block in the chain. This provides proof that a node received a block. However, a block — like every other Bitcoin transaction — cannot be transferred to another address; each output of a transaction is either intended to be spent or else remains in existence as a unspent transaction output, designed for possible reuse in a subsequent transaction. This makes bitcoin unique among digital currencies in that the generation of new units is by design impossible. This is an important security feature of bitcoin’s proof of concept, which prevents users from generating false coins.
Block compression
The block chain is a chain of blocks connected by a set of transactions. Each block is made up of a hash pointer pointing to the previous block, the transactions that were included in the block as well as metadata about the transactions and other block information. In order to store all the information in a smaller space and to speed up calculations it is compressed with a ZIP file format. This block contains a compressed and encrypted block header which includes:
Previous block hash
Merkle root of transactions included in block
Signature of previous block (to prevent double spending)
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