How do I buy an iota Bitfinex?
As with any Distributed Ledger the question is: how does the network agree on the current state? With that question, we directly also tap on the “double-spending problem” (which probably confuses most people with IOTA Bitfinex). Lets take a look at the colored Tangle picture above. Green blocks: transactions on which consensus was achieved (i.e. transaction finality with some security guarantees); red blocks: transactions where we are still uncertain on their full acceptance; grey blocks: tips (unconfirmed transactions). Goal of any transaction is it to be green — you want it to be confirmed and accepted by the entire network.
The question is, how do you go from grey, to red, to green? Without going into discussion on the CAP Theorem and the concept of eventual consistency, let me explain.
- Make sure your funds are on the Exchange wallet – (on Bitfinex we have three dedicated wallets for each of the functions of the site – Exchange, Margin Trading and Funding) – you can instantly move your funds from one wallet to another on the Wallets page.
- Go to the Trading page and choose the pair you want to trade (in this example it will be IOTA/BTC).
- In the ORDER FORM select the Exchange tab. Then you will need to specify the type of order, order size, and price if you choose “Limit” order type. If you choose instead “Market” order type, your order will be executed at a current market price.
- Click the “Exchange Buy” button.
- Your order will appear in the Orders tab.
- Once the order is executed, your funds will be credited to your Exchange wallet.
- The executed/canceled order will then move to the Order History tab.
When we look at the picture, the main difference of the green and the red blocks, is that the green blocks are indirectly referenced by all the grey blocks. This means that for every confirmed transaction, there is a direct path leading to it from a tip. As such, it is quite easy to determine the confirmation level of your transaction: we execute the MCMC algorithm N times, the probability of your transaction being accepted is therefore M of N (M being the number of times you land on a tip that has a direct path to your transaction). As a merchant, in IOTA you have complete freedom to decide with what probability you will start accepting transactions. If you are happy with 51% probability, you execute MCMC 100 times, and if 51 times or more there is a path, you accept the transaction and exchange goods. For high value transaction you can increase this threshold to 99 or even 100.
Once you have understood this concept of transaction finality in IOTA, you will start appreciating the simplicity and beauty of this system. It’s completely self-regulating and ensures both scalability and security.
Lets dive into some of the main features of IOTA, so you better understand why IOTA is so awesome.
Because IOTA achieves consensus on the validity of transactions without the involvement of any miners, we also have no transaction fees to pay. IOTA is the first transactional settlement protocol that enables you to transact even sub-cent values Peer-to-Peer without any transaction fees for either the sender or the recipient. As such, we really perceive IOTA to be the backbone of all current and future micropayment and nanopayment use cases.
IOTA was designed to enable transactional settlement at scale. Since consensus is parallelized, and not done in sequential intervals of batches as in Blockchain, the network is able to grow and scale dynamically with the number of transactions. The more transactions are made, the more secure and the more efficient the Tangle gets.
Some of our most recent stresstests have already shown Confirmed Transactions Per Second above 100 in smaller networks of less than 250 nodes, with confirmation times of 10seconds or less. A much larger stresstest is coming up soon.
The beauty of the Tangle is that you can fluidly branch off and back into the network. This partitioning is key in being adaptive to the rigorous requirements of an asynchronous IoT environment. There is no such thing as always-on connectivity, as such you need to be able to make transactions and secure data even in an offline environment. IOTA makes it possible for a cluster of devices to branch off and still make transactions in an offline environment; utilizing different communication protocols (ZigBee, Bluetooth LE, etc.) for the P2P communication. More on some specific use cases in Supply Chain and Mobility later.