A genesis block is the very first block or first few blocks recorded on a blockchain or blockchain-based protocol. The genesis block is often called Block 0 or Block 1.
The genesis block sets the foundation for the rest of the blocks that are added to form a chain of blocks. That’s where we get the word “blockchain”.
In a blockchain, every block will have a reference to the previous block. That isn’t the case with a genesis block since there isn’t a block before it in the chain. It’s the first.
So from a technical standpoint, a genesis block’s “previous hash” value is set to 0. Nothing was processed to the blockchain before the genesis block.
All blocks that follow, however, will have a “previous hash” configured to whatever was set as the previous block’s hash.
Remember, cryptographic principles secure cryptocurrencies. Each block after the genesis block will contain data about whatever transactions took place in that block plus a hash from the block before it.
Those two blocks are linked. The next block after the second block will include the same thing – transactions that took place in the new block, plus the hash made up of all the data from the previous block. And it keeps going like that.
If just one transaction is changed, the entire chain gets corrupted.
The most famous genesis block, and the very first Bitcoin block, called the Genesis Block, was created on January 3rd, 2009, by Bitcoin’s infamous and mysterious creator, Satoshi Nakamoto. Some consider this date to be the start of the cryptocurrency revolution – the start of it all!
The Genesis Block had a 50-bitcoin reward associated with it. Strangely, while the reward was sent to a valid address, it can’t be spent. It’s unclear whether this was intentional or a bug.
Block rewards are paid out to miners for their work in mining, or validating, transactions that make up new blocks. With potential hundreds of thousands of transactions occurring every day, it’s important that transactions are verified as quickly as possible.
Block rewards incentives miners to compete to validate these transactions to blocks, which are then added to the blockchain.
One very interesting thing about Bitcoin’s Genesis Block is that it contains within its block data a hidden message:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
The data is a reference to a The Times news article. The article headline provides proof that the Genesis Block couldn’t have been created earlier than the release of the article headline.
It’s thought that Satoshi included the headline as a way to support his cause for creating Bitcoin – allowing anyone, anywhere in the world to control their own money, without the need for a government or institution to get involved.