Candidate Block

A candidate block is a temporary collection of unconfirmed transactions that a cryptocurrency miner assembles and proposes for addition to the blockchain. It contains transactions selected from the mempool (the memory pool of pending transactions), a reference to the hash of the previous confirmed block, a timestamp, and a nonce, which is a random number the miner varies repeatedly during the mining process. The block remains a candidate until a miner produces a valid hash, at which point it becomes a confirmed block permanently added to the chain.

Think of a candidate block like a completed ballot that has not yet been counted: it contains all the information, but it only becomes official once it passes validation.

Miners Race to Produce a Valid Hash Before Everyone Else

Every mining node on the Bitcoin network assembles its own candidate block simultaneously. Each miner selects which transactions to include, typically prioritizing those with the highest fee-per-byte ratios to maximize revenue. They then hash the block header repeatedly, changing the nonce each attempt, trying to produce an output hash that starts with a required number of zeros. This difficulty target adjusts every 2,016 blocks to keep average block times near 10 minutes.

The first miner to produce a valid hash broadcasts their block to the network. Other nodes verify the hash and the validity of every transaction in the block. If everything checks out, all nodes update their local copy of the blockchain and the successful miner collects the block reward plus transaction fees.

The Coinbase Transaction Is Always the First Entry in a Candidate Block

Every candidate block must begin with the coinbase transaction. This is a special transaction the miner creates specifically to claim the block reward, which in Bitcoin halves approximately every four years. The coinbase transaction creates new Bitcoin from nothing and credits it to the miner's wallet address. It is the only mechanism by which new Bitcoin enters circulation. Any candidate block that is missing a valid coinbase transaction will be rejected by the network regardless of its hash.

Invalid Transactions Invalidate the Entire Candidate Block

If a miner includes even a single invalid transaction in a candidate block, such as one spending coins that have already been spent or coins that do not exist, the entire block is rejected. The miner receives no reward and must start over. This rejection mechanism is what prevents double-spending and ensures every transaction on the blockchain is valid.

Sources:
https://www.binance.vision/glossary/candidate-block
https://www.ledger.com/academy/glossary/candidate-block
https://paybis.com/blog/glossary/candidate-block/
https://learnmeabitcoin.com/technical/mining/candidate-block/
https://www.argoblockchain.com/articles/explaining-the-bitcoin-block-reward