Question

Explain how to execute a transaction on the blockchain, and explain its associated cost

Answer 1

Following are the steps through which transactions in block chain is executed :-

1. First of all user have to sign off on a transaction through their wallet. This involves sending a certain crypto from their wallet to someone else.

2. Transaction is broadcasted and then waits to be picked by miner. Those waiting transactions hover in a pool along with other transaction which are also waiting to be picked by miner.

3 . Miner then select transactions from these pool and forms them into block . Such a block is a combination of those transactions along with metadata. Every miner constructs their own block.

4 . Now to add these blocks to the block chain , the block first needs a signature. Signature is created by solving a very complex mathematical problem whichiz unique for every block. To solve these mathematical problem a lot of computational power is needed and this process is called mining.

5 . Miner that finds eligible signature (solution) for it's block first , broadcasts his signature to all other miners.

6. Other miners verify whether solution corresponds to the problem of senders block. If it is valid other miners confirm the solution and agree that block can he he added to the block chain. This is also called proof of work.

7. More confirmation your transaction get harder will be to attack it

Associated cost

Following are the associated cost

1 . Anti spam fee/ Dos fees = by this feed free anyone attempting to congested the network by broadcasting many valid transaction has to pay more in fee than legitimate user.

2. Miner subsidy = Bitcoin network is secured by proof of work where miner expend electricity in the hope of earning a block reward.

In addition to the block subsidy transaction fee paid by user is awarded to the miner.

3 Block has limited space = since block has limited space, so to acquire some space fee in that regard is also to be paid by the user.