July 4, 2022

BitJackass Diary Part 2

Every informed person should know about Bitcoin,
as it may turn out to be one of the most important world technological advances.

Leon Louv, South African intellectual, author, speaker, policy adviser, candidate for Nobel Prize.


The Bitcoin network uses the formation mechanismblocks of transactions and search for a key for their signing (mining), which ensures synchronization of the exchange of transaction data between participants in the system. When a transaction is sent to the system, it is sent to the miners, and they include (or do not include) it in the block that they are trying to sign at the moment. Signing occurs by selecting such an “additional parameter” to the generated transaction block (the transaction in which the miner stuffs at his discretion), which gives a certain number of zero bits at the beginning / end of the hash.

The number of required zero bits is adjustable independing on the time elapsed between the appearance of two signed blocks in the system. The system is configured to sign blocks once every 10 minutes, if blocks begin to appear earlier - the complexity of the signature increases.

Of this feature (system + restrictionthe size of a transaction block of 1 megabyte) follows one of the fundamental limitations of the Bitcoin system - it can pass a maximum of about 3 transactions per second through itself. For comparison, the VISA system processes about 2000 transactions per second. This makes the use of bitcoin limited, it cannot process a large number of small transactions.

In the Bitcoin system, the user can himselfAssign the commission that he pays for adding the transaction to the block by the miner. This commission goes to the miner if he successfully signed the block and this block was accepted by the system. You can send transactions without any commission at all (more precisely, only with the required minimum commission of 0.00001BTC / kb). The commission is indicated per kilobyte, thus, the more the transaction in bytes, the more the commission will be taken. Transactions with a small commission will be confirmed if the system does not have enough transactions with a larger commission that are more profitable for miners.

The fastest and cheapest transaction fee at the moment is 28 satoshis / byte. This is a dynamic quantity, so we will publish this parameter in the daily release of crypto statistics on the Smart-Lab blog, as well as
on our t-channel: https://t.me/BitJackass

Regards, BitJackass.