Bitcoin transaction fee & How does it take place?
What is a Bitcoin transaction, how does it take place ? and How secure is it?
What if there’s a technological development so powerful that it transforms the basic pillars of our society.A technology that fundamentally influences the way our economy government systems business functions and could change our conceptual understanding of trade ownership and trust. This technology already exists and is called Cryptocurrency. People think of bitcoins as only virtual money or transnational systems.
But if you will look closer, you will see that the monetary aspect is just the tip of the iceberg. That’s because bitcoin is a groundbreaking internet tech for which money is merely one of the possible applications. Money exists to facilitate trade. Through the centuries, trade has become extremely complex, everyone traded with everyone worldwide. Trade is recorded in bookkeeping and this info is often isolated and enclosed to the public and for this reason, we use third parties and middlemen we trust to facilitate and improve our Bitcoin transaction.
A bitcoin transaction is safe and secure
Think of government bank accounts, notaries, and paper-money in your bitcoin wallet, we call these trusted third parties. Now, this brings to the essence of bitcoins: Bitcoins enable a network of computers to maintain collective bookkeeping via the internet. This bookkeeping is neither secure nor in management of one party, relatively public, and available in one list which is fully allocated across the system. We call this the BlockChain.
BLOCKCHAIN – SOURCE OF TRUTH
In the blockChain, all transitions are logged including the information on the time, date, participant, and amount of every single transaction. Each node in the network owns the full copy of a blockchain, based on a complicated state-of-the-art maths principle, the transactions are verified by a bitcoins miner who maintains a ledger. The mathematical principle also ensures that these nodes automatically and continuously agree about the current state of the ledger and every transaction in it. If anyone attempts to corrupt the transaction, the node won’t arrive at a consensus and hence will refuse to incorporate the transaction in the blockchain. So every transaction is public and 100s of nodes unanimously agree that a transaction has occurred on date X and at time Y. It’s almost like a notary present at every transaction, this way everyone has access to a shared single source of truth.
This is why we can constantly believe the blockchain.
The ledger doesn’t care whether the bitcoin represents certain amounts of Euros or Dollars or anything else of value or property. Users can decide for themselves what a unit of bitcoin represents A bitcoin is divisible in 100 million units and each unit is individually identifiable and programmable this means that users can assign properties to each unit. Users can program units to represent a Eurocent, or share in a company, a kWh energy, and a digital cert of ownership Because of this, bitcoin is much more than money and payments. A bitcoin can represent many properties, 100 Euros of oil, award credits, or a vote during elections for example.
Make our currency smart with Bitcoin transaction
Moreover, bitcoin allows us to make our currency smarter, and to automate our cash and money flow. Imagine a healthcare allowance in dollars or Euros that can only be used to pay for health care at certified parties. In this case, whether someone follows the rule is no longer verified in the bureaucratic process afterward. So you simply program these rules into the money, ergo COMPLIANCY UPFRONT.
Bitcoin transaction saves time and labor
The unit can even be programmed in such a way that it automatically returns to the provider if the receiver doesn’t use it after a certain amount of time. This way the provider can ensure that the allowances are not hoarded. A company can control its spending in the same way; by programming budgets for salaries, machinery and materials, and maintenance so that the respective money is specified and cannot be spent on other things. Atomizing such matters leads to a considerable decrease in bureaucracy which saves the accountant, controllers, and the organization an incredible amount of time.
But there’s more.
In the internet of things, our economy will be actively handling devices that actively contribute to the economic business. They are already here: Think of a vending machine or drones, distributing packages. These machines are different from the concept of trust but Bitcoin is not. Because of a bitcoin, the drone will be hundred percent sure that the drone will deliver the package to the right recipient and know for sure that it’s been paid for. And we program the vending machine in such a way that it will automatically keep track of its supplies, order new supplies from the supplier and pay for them automatically.
Of course, you will understand that Bitcoin transaction is only the beginning, Internet Technology is disruptive, and breaks the status quo, it opens markets and breaks the position of middlemen all the time.
Bitcoin and Cryptocurrencies have caused a paradigm shift, it’s time to explore this new technology constructively and critically and openly discuss potential applications.
