Good evening, ladies and gentlemen. Tonight, we bring you an in-depth report on the life cycle of a transaction. From the moment a customer decides to make a purchase, to the final settlement of funds, we’ll take you through each step of the process. First, the transaction begins with the initiation stage. This is when a customer decides to make a purchase and presents their payment method to the merchant. The merchant then sends the payment information to their payment processor, who in turn sends it to the card network. Next, we move on to the authorization stage. The card network sends the transaction details to the issuing bank for approval. The issuing bank checks the customer’s account to ensure there are sufficient funds or credit available for the transaction. If everything checks out, the issuing bank sends an authorization code back to the card network, who then passes it on to the merchant. Once the transaction is authorized, we enter the clearing stage. At this point, the merchant sends a batch of authorized transactions to their payment processor at the end of the business day. The payment processor then forwards these transactions to the card network, who in turn sends them to the issuing bank for posting to the customer’s account. Finally, we reach the settlement stage. This is when the issuing bank transfers funds to the card network, who then sends them to the merchant’s bank. The merchant’s bank then deposits the funds into the merchant’s account, completing the transaction. And there you have it, folks. The life cycle of a transaction, from start to finish. It may seem like a simple process, but there are many moving parts involved in ensuring a smooth and secure transaction for all parties involved. Thank you for tuning in to tonight’s report.

Feb 17, 2023 | News | 0 comments

The Natural Order of Kaspa Transactions

Transactions are the heartbeat of any blockchain system, enabling the transfer of digital assets between accounts. While they may seem fleeting to the average user, the information they carry is etched into the blockDAG’s history. Let’s break down the journey of a Kaspa transaction from start to finish.

  1. A user kicks off a transaction, selecting UTXOs (unspent transaction outputs) to send to the intended recipients.
  2. The wallet software crafts the transaction and sends it to a connected node. The node adds it to its mempool, shares it with other nodes, and waits for it to be included in a block. If it’s not included within 60 seconds, it’s dropped and must be resubmitted.
  3. Miners request a block template from the node, which includes transactions from the mempool. They then work to find a special number, called a nonce, that will make the block hash acceptable under the current difficulty level.
  4. When a miner succeeds in creating a valid block, they submit it to the node for verification.
  5. The node checks the block’s validity, then broadcasts it across the network. Other nodes validate it too. If an older block is found that should have come before this one and it uses the same UTXOs, the newer transaction is canceled to prevent double spending.
  6. Network nodes confirm the new block and its transactions, add it to their blockDAG, update the UTXO set, and remove any included transactions from their mempool.
  7. As more blocks pile on top of a transaction, it becomes harder to alter or reverse. Generally, a transaction is deemed “confirmed” after a certain number of additional blocks (often 10) have been added.
  8. If a transaction is ever changed due to a blockDAG reorganization, related UTXOs are adjusted or removed as needed. But after 24 hours on Kaspa, transactions are “cemented” and immune to reorganization.

Once a transaction has enough confirmations on the blockDAG, it’s permanently recorded in the public ledger as part of a block, forever part of Kaspa’s history.

Tip: Kaspa currently processes about 200 transactions per second, with a potential increase to 6400 TPS after updates.

For more information on Kaspa, check out these resources:

Feel free to comment or ask questions below.

You can also chat with me on the Kaspa Discord — look for Bubblegum Lightning.

This article originally appeared on Kaspa’s official blog.

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