Timelock/Locktime

November 21, 2023 - Around 2 mins mins to read

Understanding Timelock/Locktime

A Timelock, also known as Locktime, is a predetermined schedule that governs the processing of cryptocurrency transactions on the blockchain by miners.

Miners include transactions in the Merkle Tree, a data structure used for efficient verification of transaction data, only after approving a specific block height.

Transactions are considered approved only after they are included in the Merkle Tree.

Satoshi Nakamoto, the creator of Bitcoin, made Timelocks a mandatory feature in all transactions.

The default blocking time is set to 0x00000000 (0).

The main purpose of Timelocks is to ensure that transactions are not verified until a certain time or block height is reached.

There are two types of Timelocks: absolute and time-relative.

Absolute Timelocks define blocks relative to a specific time.

Time-relative Timelocks determine the amount of time that must pass before transactions can be verified.

Bitcoin transactions measure time in two ways: block number and timestamp.

When a Timelock is based on a block number, miners receive a specific block number to determine the Timelock.

For Timelocks based on timestamps, miners must wait until a specific time period has elapsed before confirming the transaction.

Unix time is used to measure this time period.

There are four methods to determine timeblocks in Bitcoin: nSequence, nLocktime, CheckLockTimeVerify, and CheckSquenceVerify.

nLockTime involves absolute blocking at the transaction level.

nSequence is a Timelock relative to transaction levels.

CheckLockTimeVerify involves absolute time blocking at the script level.

CheckSquenceVerify is a Timelock relative to the script level.

Glossary