Block transaction: how do they work and how to track them?

Satoshi Nakamoto creator Bitcoin in 2008 published an article "Bitcoin: a peer-to-peer electronic payment system" and introduced a radically new way in the world to exchange money. Since then, the need for a third party, such as a bank or another financial institution, has simply disappeared. In fact, this has become a new financial revolution.

Today we will talk about how, from a technical point of view, there are blocking transactions, how reliable are they, what characteristics do they have and how can they be monitored?

Summary:

  1. How does blockage work as a whole?
  2. How are block transactions organized?
  3. What are the characteristics of a block transaction?
  4. How to test a block transaction?
  5. Reasons for transactions to freeze
  6. Conclusion

1. How does the block work as a whole?

It should start from the fact that Bitcoin is the first completely digital currency. Unlike electronic money, it does not even exist as a digital file. All that is is a huge flow of data on all the transactions that have ever been committed. Blokchan is presented in the form of a giant book, which is available to all participants in the network.

Each transaction is not stored separately, the information is entered in the blocks. Different networks have different block sizes, for example, until recently a block in the bitcoin network "weighed" 1 mb. But the BitMEX report says that after the introduction of the new SegWit protocol, the average size of a block has increased to 1.06 MB and some have reached 2 MB.

To obtain a new block, there are different mechanisms of consent. The most common is:

  • PoW (job test). Here, miners must solve a complex cryptographic equation. Then, a new block is added, for which the system rewards the finder with a certain number of coins.
  • PoS (Share the proof). This mechanism involves adding a new block to a user who has a certain number of coins. The more coins a user has, the more likely he will generate a new block.

Each successive block stores information on the previous one. Another important feature of the block is its decentralization, since the information is stored simultaneously by all the participants in the system (miners, main nodes). Therefore, after the block has been added to the block, it can not be edited or deleted.

2. How are block transactions organized?

As stated above, transactions carried out in the blockrooms network do not require the participation of a third party. Let's see how this happens in practice.

Let's say you want to transfer 0.5 BTC to another person. Before the system recalculates the balances of purses (not the translation, ie the allocation), this transaction will fall into the so-called Memory Pool, the operational memory of all the miners connected to the network. After this, the blockchain transaction must be confirmed by at least 6 different miners. They (the miners) should check the correctness of the transaction:

  • the amount of commission for each byte of information
  • the physical ability to add a transaction to an existing block (if there is little space in the block, the transaction is transferred to the next one that must be found).

After these actions, transactional data is permanently entered in the block and coins are credited to the recipient's bag.

3. What are the characteristics of block transactions?

On the basis of the information above, it is worth highlighting a series of typical features for blocking transactions:

  • Irreversibility. Because the block is a decentralized system, it affects data that has already been entered in the registry, it is not possible. Therefore, it is impossible to notice the operation already completed.
  • Lack of regulation. Due to the absence of the center from which the system is managed, it is impossible to completely prohibit and close the cryptographic currency. To do this, you have to destroy all miners' computers.
  • Anonymity. Every detective has his or her level of anonymity, but in any case, even in anonymous pseudonymized networks, such as Bitcoin, for example, for the conduct of transactions, the names and surnames of the users are never used.
  • Reliability. The network algorithm corrects the balance of all portfolios at the same time, but only a user who has a private key can execute a transaction from a specified purse. Subject to compliance with elementary safety rules, it is not possible to break the portfolio. You can lose your coins only because of you. For example, send to the wrong bag, infect your computer or smartphone with a virus or somehow transferring private keys to scammers.

4. How to verify the transaction of a block transaction?

Transactions in the bitcoin network can be traced on the website www.blockchain.info . To see information about a particular transaction, you must go to this site and enter a unique transaction hash in the search. Then the system displays the actual information.
In this service you can also view information about a particular portfolio:

  • transactions for the entire history (by date)
  • the total number of coins that are pass through the portfolio
  • a list of all the addresses with which the interactions occurred (inbound or outbound transactions);
  • current balance.

5. Reasons for transactions to freeze

The main problem with Bitcoin and many other coins is the speed of block transactions. At BTC, this indicator reaches a sign of 7 operations per second. Previously, when the total number of users was small, this was sufficient. But now, with the growing popularity of the industry, the turnaround of the transaction can be extended to tens and even hundreds of thousands of unconfirmed transactions. To see the current list, which is updated in real time, here it is possible on this service .

Some transactions may even crash in the Memory Pool for a long period of time (up to 72 hours). Which factors influence the transaction confirmation rate?

  • The total workload of the meme pool.
  • A very small commission is established. Miners first confirm transactions with a larger commission.
  • Transaction too heavy and simply does not fit into an almost completely filled block. In this case, it will be automatically transferred to the next one.

6. Conclusion

The crypto-currencies have made a real revolution in the financial sector, on a scale that we can not yet understand. The number of block transactions grows every year. To be able to use Bitcoin at the same time (like Visa, for example), you need to solve the problem with bandwidth.

Block transactions have both of their advantages: the absence of intermediaries, small commissions, anonymity, security and their shortcomings: irreversibility, small bandwidth.

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