Transaction Locktime (nLockTime)

The final 4 bytes of every Bitcoin transaction are reserved for a field called nLockTime. This field allows a user to specify the earliest moment that a transaction can be included in a block.

1. The Concept of "Finality"

By default, most transactions are created with a locktime of 0, meaning they can be mined immediately. However, if a user sets nLockTime to a future block height or date, the transaction is considered "non-final."

• Mempool Behavior: Nodes will usually not accept a non-final transaction into their mempool.

• Miner Behavior: Miners will reject any block that contains a transaction whose nLockTime has not yet been reached.

2. Location in the Transaction

In the raw hex data of a transaction, nLockTime is always the last 4 bytes. This is because the nodes need to read the entire transaction structure before determining if it is time-locked.

3. The 4-Byte Format

The field is a 4-byte Unsigned Integer (uint32) stored in Little-Endian.

• Hex: 00000000 -> Locktime 0 (Immediate)

• Hex: 808d5b5d -> A Unix Timestamp

4. Why Use Locktime?

1. Post-Dating: You can write a transaction today that "unlocks" your funds for a recipient next year.

2. Fee Bumping Protection: Locktime is sometimes used in complex protocols to ensure a transaction isn't mined before a certain state is reached.

3. Anti-Fee-Sniping: Modern Bitcoin Core wallets set nLockTime to the current block height by default. This prevents "Fee Sniping," where miners re-mine old blocks to steal transaction fees.

Property	Value
Size	4 Bytes
Position	Final field in the TX
Storage	Little-Endian
Scope	Transaction-wide

In the next section, we will discuss the 500 Million Threshold and how it determines if a lock is based on blocks or time.