Altcoins News
By James Thorp
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The world of electronic payment transactions will not revolve in the absence of financial institutions which are serving as trusted third parties.
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To avoid rising costs, financial institutions will want more information about the customers who are transacting. A certain extent of fraudulent activity is unavoidable.
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When there is a desire to eliminate a trusted third part, all the details of the transaction should be publically announced. Timestamp made it possible.
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To implement a distributed timestamp server on a peer-to-peer basis the concept of proof-of-work came in to being.
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The network works in such a way that new transactions are broadcast to all nodes. Each node collects new transactions into a block.
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The longest chain is considered to be the correct one. Incentives are provided for the nodes to stay honest.
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There are other simplified payment verification methods where, payments are verified without running a full network node.
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Another limiting factor is privacy, when all the transactions are visible to all, there little privacy.
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