CryptoURANUS Economics: ChangeOfHands: Cryptocurrency


Tuesday, July 23, 2019

ChangeOfHands: Cryptocurrency

What is cryptocurrency definition of "Change Hands"? 

What is cryptocurrency definition of "Change Hands"? This is similar to the dead-president green-back USD definition of "cash change of hands".

Example: Miss Penelope gives cash to Mr. PeeWee, and then he becomes the new owner of these dead-presidents.

In  same example of transacting online. A third party or payment service validates transaction(s) and ensures that your Mom's money makes it to Long-John-Silvers account.

When it comes to transacting in cryptocurrency? How does digital money change hands?

About trust to transact:

Transactions require blind trust, because economic value is at stake. If transacting parties are strangers, they may ask a trusted third party to oversee transactions to its end completion.

Cryptocurrencies are mostly or attempt to be decentralised.

This means that digital parties transact/interact directly without oversight of  third party ensuring integrity of transaction(s).

Blockchain technology always crosses line into third party void, whereby to verifying and recording transactions translates into true and authentic completion.

The use of 'public key cryptography' ensures digital transaction(s) information sent remains confidential.

Public key cryptography provides the transaction authorization and privacy.

Third party transaction(s) interacting in cryptocurrency exchange offer higher security by this blockchain technology and public key cryptography making privacy and secure transactions a better relativity than reserve banking.

How cryptocurrency changes hands
  1. Let's say Miss Motley wants to send Long-John five bitcoin. Her transaction is sent to a server nodes (computer servers) in the Bitcoin blockchain network.
  2. These nodes check transaction(s) are valid based on the transaction  network cryptographic and interaction rules. By checking Miss Motley's public key decrypts targeted digital signature attached to her transaction that she originally authorised bitcoin(s) transferred.
  3. Mss Motley and Long-John's transaction have not yet been entered in the blockchain (distributed online ledger). This transaction added to the pool of unconfirmed transactions.
  4. Unconfirmed nodes in network group batch transactions into 'block's is process by definition termed of 'mining'. The blockchain mining is between computers. This requires nodes to find a certain number  combined content of a block of transactions and crunched/hash through a specific algorithm. This results in another number (hash) of predefined qualities.
A Bitcoin network hashes for 10 minutes to guess a correct number.

This is the rational term of; 'mining'.

The efforts in maintaining a server blockchain associated with the costs associated server-computers in successful mining have it's economic rewarded.

  1. Once a hash transaction block has been completed, the successful miner broadcasts their result to the rest of the blockchain network. The network checks that the newly created block is correct and starts the processing a new block all over again.
  2. The transaction is now confirmed, Miss Motley and Mr. Long-John will now wait until further blocks hashes added to the chain before acting on their transaction.
Transaction block(s) contain(s) the hash calculation for the previous block, anchoring them in a chain fashion.

Hash acts as reference specific to transactions block(s).

If one block changes, all of the hashes from that block forward must also change so that the blocks remain linked.

Good luck in all your Bitcoin Alt-Coin adventures and until next time good luck.

No comments: