Transactions on Internet today are hugely reliable

Transactions on Internet today are hugely reliable on financial institutions playing the role of third parties. The system suffered several pitfalls including the limitation of the size of transaction, loss of availability of non-reversible payments for that type of transaction and many more. This leads to the need for electronic payment system based on the cryptographic database.  Nakamoto explains that the core idea to introduce this system was to facilitate transactions which are impractical to be reversed and would be helpful to secure the payment method from the users CPU and scanning of SHA-256 is played vital role in the proof of safe transaction.

For the saving transaction, Nakamoto also gave the solution to use a hash system in which owner sign the hash key of the last transaction and provide the public key of next owner at the end of the coins and then the recipient can confirm owner and chain loop as well. But the problem here is double-spend, to overcome on this problem author also suggest that all transaction should go through mint (a system where all codes get checked to avoid double spending on the same transaction) so the payee can confirm the code and time of each transaction. The solution also includes Timestamp server that will recode all the hash of the block and publish it in the newspaper or web server to update everybody. At the end scanning of hash with SHA-256 is involved in proofing of work after scanning no codes or mixture can be changed and to match the speed of transactions modify systems and hardware is part of the game.

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Different methods to run the network for broadcasting block chains include collecting new transactions into a block, find the proof of work for each block and accept only those blocks whose transactions are valid. The nodes allow the most extended chain of nodes and operate on the first node that it receives in first and works on that block until next block is found that is longer. The initial transaction is unique as it circulates the coins in the system in the beginning by adding some incentives to the transaction that are inflation free.  Nakamoto explains the reclaiming disk space with the help of the hash trees. According to Moore’s Law, with the increasing capacity of RAM for storage, the block headers are to be kept in memory. In simplified payment verification, the user is required to keep a copy of the block header and also obtain the Merke branch. In this he can view that the network has accepted the node or not of the longest proof-of-work chain is needed by the user that can be achieved by asking all the nodes in a system to make sure it has the longest string. Also receiving the Merkle branch to link the transaction to the block it is time-stamped in.

 In combining and splitting value for bitcoins, it is difficult to carry the value for each cent in the transaction. Either it would contain one input as a result of multiple transactions or at most two outputs. The significant disadvantage of traditional banking model involves the necessity of announcing all transactions publicly and limits the access for information for involved parties. The privacy model has an advantage of keeping the identities of the people anonymous for transactions. Santoshi Nakamoto in the article lastly considers that if an attacker attempts to generate a chain of the code shall be unable to do so as the nodes shall not be accepted for payment. Another situation mentioned is for a gambler to tries to reach a breakeven point with unlimited credit whose possibility of winning is assessed by notations of probability. As a result, the probability decreases with the increase of the number of blocks cached up by the gambler. To calculate the time of wait for each receipt so that the sender cannot the change the Poisson distribution can calculate the expected result

In conclusion, it can be said that Nakamoto began with the outline of the system for an electronic transaction that is not reliable with a brief mention about digital signatures and how it prevents double spending. A solution to avoid the exposure of privacy was presented in the form of the peer-to-peer network, but any further requirements can be the part of the mechanism.


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