To enable a decentralised network that anyone can join and use for verifying, committing, or securing transactions on the database, it is necessary to have a blockchain. Blockchain and AI will revolutionize the future of the supply chain. This unchangeable chain of data allows users to monitor all activity in the system without any single point of failure because the ledger is not stored centrally but instead distributed across nodes around the world.
However, due to this distributed nature, updates are slow and transaction processing times are usually quite lengthy. For a transaction to be completed, a block containing the associated data must first be generated and verified by the network. This process of creating the new block is known as “block time.” Once this block has been approved and meets consensus rules, the transaction can be finalized.
What is block time?
Verifying transactions and producing new blocks in blockchain can take up a certain amount of time, which is known as “block time.” Once the second block has been added to the chain, it’s nearly impossible for anyone to roll back or tamper with the first one. This process is called confirmation; consequently, every subsequent block adds another layer of security and stability to the network. The Bitcoin blockchain typically confirms transactions within a 10-minute interval, though this block time isn’t rigid. It can range from just seconds to as long as several days depending on various factors. With every block of transaction that is added to the blockchain, all transactions inside are considered “processed”.
Working of a Block Time
Satoshi Nakamoto decided to have a ten-minute block time to balance out the amount of time it takes for other miners to discover and add onto new blocks, versus wasteful chain splits which occur when two miners find valid solutions at roughly the same time. After a newly mined block is discovered, its confirmation does not happen instantly – it still has to be communicated via network protocols between nodes before being accepted as part of the longest chain.
After the genesis block, it took an astounding five days, 8 hours and 32 minutes for Satoshi to find a new Bitcoin block — due to limited computational power as well as technical difficulties during the first year of running. This sets the record for the longest wait time between blocks on the Bitcoin blockchain. After a period of adjustment, the average time for blocks to be mined has stabilized at around 122 minutes. The block time is constantly adjusted depending on the fluctuating difficulty and hash rate that are added or removed from the network.
Ways to get around block time limitations
Zero-Confirmation and Green Addresses
With the ongoing growth of the Bitcoin economy, block space could soon become scarce. If a scaling solution cannot be found to compensate for this, businesses may need to resort to using “trusted addresses” to complete transactions without waiting for confirmation. Major corporations might provide such services by signing and reusing PSBTs or known trustworthy addresses, possibly backed up with fraud insurance should that arise as an issue.
To bypass the need to wait for blockchain confirmation, some people are proposing a covenant — essentially an extra-special Bitcoin transaction with special rules attached. Even if it doesn’t get confirmed in the block, this type of transfer can be enforced while it stays in the mempool, enabling two parties to agree upon and receive funds much more quickly than waiting for a blockchain confirmation.
Move to Scaling Layers
You can increase the speed of transferring your funds or keep them on second-layer networks such as Liquid and Lightning. With Liquid, users will benefit from 1-minute block times whereas with Lightning you’ll have the instantaneous transfer of funds since channel balances are handled off-chain.
SOURCE Vestigo Finance