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The Bitcoin Masterclass (London) Day 1: How party-to-party transactions work on the blockchain

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The Bitcoin Masterclass (London) Day 1: How party-to-party transactions work on the blockchain

Party-to-party transactions on the blockchain refer to direct transactions between two individuals or entities without the need for intermediaries.
Overview:
• Party-to-party transactions refer to direct transactions between two individuals or
entities on the blockchain without intermediaries.
• Benefits include increased security, lower transaction costs, greater transparency,
control over financial transactions, and data privacy.
• Transactions are not limited to geographic locations and can involve exchanging
information between associated individuals and others.
• Bitcoin's Sigops enable the splitting of multi-coin payments among different parties
and the sending of authorisation requests directly to different parties, creating
accountability.
• Examples of using party-to-party transactions include more efficient bill splitting
and tipping, attaching restrictions and approving invoices directly from wallets,
improving shipping and logistics, legal party-to-party gambling, swapping media formats
using NFTs, and tipping people directly on social media.

Dr Craig S. Wright, Chief Scientist at nChain, recently held the first of his Bitcoin Masterclasses at an exclusive venue in London. The two-day immersive course forms part of a monthly series aimed at helping attendees understand the fundamentals of Bitcoin and the technology behind it.

Bitcoin Masterclass will give you a comprehensive overview of the history, the theory and the design of Bitcoin. Wright discussed the future of Bitcoin and the unbounded scalability of nChain’s blockchain solutions with potential use cases across several industries.

In the first workshop, Wright explains the true concept of identity and privacy concerning Bitcoin and digital cash systems. The fourth session focused on how party-to-party transactions work on the blockchain.

What are party-to-party transactions?

Party-to-party transactions on the blockchain refer to direct transactions between two individuals or entities without the need for intermediaries such as banks, payment processors, or other third-party service providers.

Party-to-party transactions on the blockchain offer several benefits, including increased security, lower transaction costs, and greater transparency. They also enable greater control over financial transactions and data privacy since parties have complete ownership and control over their data.

Wright noted that party-to-party transactions do not need to be limited to geographic locations, but can involve exchanging information between associated individuals and others.

Using Bitcoin’s Sigops, it is possible to sign a partial input, enabling the splitting of multi-coin payments among different parties. He added that authorisation requests can be sent directly to different parties, such as between a store manager and the treasury at the Head Office, with both parties required to sign, creating a system of true accountability.

This system also records everything with timestamps, enabling auditors to detect fraud if collusion occurs between the store manager and treasurer.

The benefits of party-to-party transactions

As part of his presentation, Wright touched on several ways that individuals, businesses and governments can use party-to-party transactions, as they have the potential to significantly transform several sectors. Specific examples he gave include:

  • More efficient bill splitting and tipping would allow individuals to tip service workers such as kitchen staff and waiters directly;
  • Allowing users to attach restrictions to where the money can be used and approve invoices directly from their wallets;
  • Improving shipping and logistics by allowing empty ships to advertise available space for bidding and enabling parties to trade or swap space via tokenisation;
  • Enabling transparent and legal party-to-party gambling through time stamped bets;
  • Allowing parties to swap books and other media formats for limited periods using NFTs;
  • Tipping people directly on social media.

Ryan Brothwell

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