> first the miner finds a valid block that includes the high-reward transaction before the latter is broadcast, then the conspirators broadcast the transaction, followed closely by the valid block including it.
Negative on the second part. The only reason that the P2P network exists is to (a) get blocks (which all nodes do), and (b) share transactions so that they can be included in blocks. Once a transaction is in a block, that's it, it's on the chain. It isn't transmitted separately. Once a node gets a new block over the P2P network, it validates it, and removes all of the transactions included in it from its transaction pool.
> But is it not possible that at about the same time, another miner finds a valid block containing one or more of the same transactions used in the special block (though obviously not the so-far private high-reward one) and broadcasts that
Yes, conflicts can and do happen (this is called a fork). It's actually quite likely, when you think about it; if blocks are found an average of once every ten minutes, and say it takes a few seconds for the P2P network to transfer the latest 1 MB block to all nodes, then you can have a situation were two mining pools find blocks simultaneously that conflict. The longest chain always wins out, otherwise it's whatever block you mined first. Absent an adversarial situation, the odds of having a fork that lasts even two blocks is so low that it should happen on average well less than once a month.
I want to point out an incorrect understanding in this one particular statement though:
> another miner finds a valid block containing one or more of the same transactions
Blocks don't conflict because they have the same transactions, they conflict because each block has a parent, and multiple blocks with the same parent is a conflict. Even if two blocks had no duplicate transactions between them at all, if they topologically form anything other than a straight line on the blockchain (i.e. sharing a parent) then they conflict, and only one will win out.
> if the block containing the special transaction falls by the wayside, that transaction could be included in another valid block by any miner?
Yes, it could be, but I do not believe that the Bitcoin software by default adds transactions to its transaction pool from orphaned blocks. That might be an optimization you could make if you wanted to take advantage of high-fee transactions that end up being orphaned that aren't broadcast to the network before inclusion into a block.
Negative on the second part. The only reason that the P2P network exists is to (a) get blocks (which all nodes do), and (b) share transactions so that they can be included in blocks. Once a transaction is in a block, that's it, it's on the chain. It isn't transmitted separately. Once a node gets a new block over the P2P network, it validates it, and removes all of the transactions included in it from its transaction pool.
> But is it not possible that at about the same time, another miner finds a valid block containing one or more of the same transactions used in the special block (though obviously not the so-far private high-reward one) and broadcasts that
Yes, conflicts can and do happen (this is called a fork). It's actually quite likely, when you think about it; if blocks are found an average of once every ten minutes, and say it takes a few seconds for the P2P network to transfer the latest 1 MB block to all nodes, then you can have a situation were two mining pools find blocks simultaneously that conflict. The longest chain always wins out, otherwise it's whatever block you mined first. Absent an adversarial situation, the odds of having a fork that lasts even two blocks is so low that it should happen on average well less than once a month.
I want to point out an incorrect understanding in this one particular statement though:
> another miner finds a valid block containing one or more of the same transactions
Blocks don't conflict because they have the same transactions, they conflict because each block has a parent, and multiple blocks with the same parent is a conflict. Even if two blocks had no duplicate transactions between them at all, if they topologically form anything other than a straight line on the blockchain (i.e. sharing a parent) then they conflict, and only one will win out.
> if the block containing the special transaction falls by the wayside, that transaction could be included in another valid block by any miner?
Yes, it could be, but I do not believe that the Bitcoin software by default adds transactions to its transaction pool from orphaned blocks. That might be an optimization you could make if you wanted to take advantage of high-fee transactions that end up being orphaned that aren't broadcast to the network before inclusion into a block.