Andreas M Antonopoulos, the author of Mastering Bitcoin and a Bitcoin proponent, elucidated the reason Bitcoin transaction fee does not show up in the block explorer as a transaction output, during his recent Q&A session on Youtube. He also spoke about the where the payment is actually stored.
The author started by stating that the block explorer shows all the information except the transaction fees because the information is not included there. He added that a transaction fee does not include a specific output for fees and that fees are not explicitly a part of the transaction. Andreas further pointed two hurdles for including the transaction fees in the block explorer.
First, the miner’s address is required for output, and an output is needed in the transaction that can be redeemed by a miner. However, since there is no prior information on the miner, this is rendered impossible. Second, there would be an extra output in every transaction if fees were considered as one. So, if there are 4000 transactions in a block, then there would be 4000 extra output for transaction fees.
“Yet if the fees [of the transactions in that block] will all go to one miner [or mining pool], why do we need 4,000 outputs [Luckily], that is not how fees work.Fees are leftover, meaning you have inputs that bring a certain [amount of] value into a transaction, and then you have outputs that spend less than that.”
He went on to say:
“The difference, the [portion] that is funded by the inputs but isn’t spent by the outputs, the over-fund of inputs minus outputs, whatever is left over, is the fee. You make a fee in a bitcoin transaction by funding the transaction with inputs… and then spending less than the entire amount. Whatever is left over is the fee. It is implicit, it is not explicit.”
This was followed by the author speaking about where the public address that receives all the fees is, including the payment. Here, he stated that they are included in the coinbase with the block where the transaction is mined.
“If you look at your transaction in a block and at the coinbase transaction of that block… the coinbase reward is 12.5 bitcoin. The coinbase transaction pays to a specific P2PKH, or it might be a different type of script, but usually it is a P2PKH. You can see which address the miner is [being paid] to, which is not the 12.5 bitcoin. They are [paid an amount like] 12.513621, 12.6, or 12.6253 [bitcoin]”
He further stated that the extra satoshis is the fees from all of the transactions included in the block.
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Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021
The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.
According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.
Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,
“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”
Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,
“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”
Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,
“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”
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