Confirmation Time and Service Level Agreement
A point of contention for the layperson is that the Bitcoin blockchain requires a wait-time, on average, of ten minutes for a transaction to execute. Due to this, they contend that Bitcoin transactions are slow. This notion, however, is inaccurate. Bitcoin transactions execute at near real-time speed and confirmations (an indication that the transaction has been included in the immutable ledger) are only required when performing a counterparty risk transaction (a transaction of financial value). In a traditional Bitcoin transaction, the receiving party is taking on risk from a counterparty that is sending value in the form of a Bitcoin because until the transaction is embedded in the immutable ledger there is a risk of a double-spend where the receiving party may have the transaction reversed without their knowledge. The conjecture that “Bitcoin transactions are slow” conflates the time it takes to receive a transaction with the time it takes to get the first transaction confirmed. Since our customers own both endpoints of the communication stream, there is no counterparty risk and confirmation time is therefore rarely pertinent with the risk of double-spending being nonexistent.
The system defaults to and we always recommend using the Catenis off-chain messaging technology as it has a negligible cost is significantly robust and does not bloat the blockchain. Additionally, for a decentralized application there is rarely a need to have a message verified on the blockchain in a rapid fashion if it is not a financial transaction. This feature is available for users who need each individual message logged to a unique bitcoin transaction.
To ensure transaction network fees are always at their lowest, Blockchain of Things provides a Service Level Agreement (SLA) for standard messages. The SLA guarantees message logging, message sending to target devices, asset issuance, and asset transference all in real-time with a confirmation time that can be up to 5 hours. In most enterprise and industrial applications, it is more pertinent to deliver the message in real-time and later cryptographically prove its delivery. Again, this is done to ensure low transaction fees. Additionally, Catenis provides an option to aggregate logged or sent messages into a single Bitcoin transaction. This service aggregates hundreds, even thousands of transactions by embedding a Merkle tree root hash in the blockchain to allow validation of all logged or sent messages. This gives Catenis the ability to only spend one transaction’s worth of network fee to provide proof of logging and messaging for tens of thousands of messages (transactions). This option reduces Bitcoin transaction costs to fractions of a cent per message transmitted and logged, making it extremely cost-effective for our customers to integrate with the Bitcoin blockchain.