A Beginner’s Guide to Newcomer RaiBlock
Since the release of bitcoin in 2009 and by extension, the cryptocurrency ecosystem, have both come a long way. Tossing aside the inevitable discussion about bitcoin’s, which reached astronomical highs in 2017, the past year was also a significant one regarding feature additions and quality of life improvements for the digital currency. The introduction of Segregated Witness (SegWit), for example, was entirely successful, even though only ten percent of transactions are from SegWit addresses.
Capitalizing on Bitcoin’s Critical Vulnerabilities
Despite these improvements and the much anticipated Lightning Network to arrive in the near-future, the shortcomings of bitcoin are becoming increasingly relevant. Transactions on the bitcoin network typically take a few hours, if not more, to finally go through.
According to its whitepaper, RaiBlocks is an alternative cryptocurrency that almost aims explicitly to do away with the exact problems bitcoin has been, so far, incapable of resolving.
The authors touch on bitcoin’s scalability issues, high transactional overhead, in terms of time and fee, and finally, the staggering amount of electrical energy consumed each year for the network to function successfully.
As a result, RaiBlocks (XRB) offers transactions in real-time without the proof-of-work system employed by bitcoin and also does so with zero effective fees on each transaction.
The way XRB achieves this is not too far off from IOTA’s approach of perhaps the same problem since the two heavily rely on the existing concept of blockchain technology. The similarities, however, end there. The speedy cryptocurrency employs its block-lattice infrastructure as an alternative, while IOTA does not.
Furthermore, every user on the RaiBlock protocol is assigned an individual blockchain, called an account chain. The chain cannot be modified by anyone, except for the person who owns it, guaranteeing security.
What this means is that senders and recipients of payments rely solely on their account chains and not the processing of entire blocks on the network.
Executing Transactions
To facilitate a transfer of XRB, the sender and receiver must independently initiate a transaction identical to each other. This initiation allows for a type of two way confirmation as the exchange will be classified as pending if only one transaction is received.
Once both parties sign a block, the transaction is deemed successful and settled. Finally, the chain only stores the net value of the account and not a record of all transactions taken place on the network, reducing the overall size of the blockchain.
Considering how the RaiBlocks system makes transactions fast, free, and scalable, it is prudent investment advice to keep an eye on the future direction of the cryptocurrency. As of the time of writing this article on January 2, 2017, XRB is trading at $30. For comparison, it was only in November when the price was $0.10.
At this time, it is still early days for RaiBlocks, and thus, it has very limited support in terms of supported exchanges and wallets. With the passage of time though, the development team has claimed that support for the cryptocurrency will improve all over, including tie-ups with merchants to introduce XRB as a payment method.
