Benefits of Ardor 0 Fee Transactions

In my previous article about the token duality problem I explained why the model of single blockchain/single token does not work well for real life applications.

To emphasize this, let’s look at a simple example. Shortly after we released the Nxt Monetary System back in 2015 we were approached by an entrepreneur who wanted to use the blockchain to sell concert tickets.

The use case was clear, scale wasn’t a big issue and building a wallet based on the Nxt APIs looked straight forward. The idea was that for each concert, the organizer would issue a token, where each unit represents an entry ticket. Customers would buy this ticket for Nxt and check into the concert by sending the token back to the organizer. The choice if to let users transfer and trade the ticket token between themselves was left to the organizer since both options allowing or preventing this were supported.

As soon as we started to look deeper into the design, we ran into a problem, since in order for users to spend or transfer the ticket token they purchased, they had to pay transaction fees denominated in Nxt. This meant that the organizer had to send together with the ticket token, also at least 1 Nxt to pay the transaction fee. Transfer of token and transfer of Nxt are considered two different transactions so the organizer had to pay 3 Nxt for every ticket sold (1 to the buyer to pay his transaction fee and 2 in direct transaction fee) and the buyer was limited to a single transaction. Needless to say that this clumsy design was quickly abandoned.

Fast forward to Ardor, when using a currency or asset issued on an Ardor child chain, this problem is solved. You can now issue your token (asset or currency) on one of the child chains (Ignis for example) then send the ticket token to the buyer without funding their account with Ignis. When the buyer spends the token they will issue a 0 fee transaction. The organizer will run a custom bundler which will only bundle transactions specific to their asset for free.

Using this design, end users only need to deal with the ticket token not with the child chain or parent chain tokens, in fact they don’t even need to know they are using a blockchain. The organizer needs to purchase in advance enough Ardor to cover the transaction fees paid by his free bundler and this way hedge against fluctuations in the Ardor price. The initial cost of this Ardor can be factored into the ticket price, and ticket prices can be even denominated in Euro using the AEUR chain.

The unique parent/child architecture of Ardor, provides the ability for businesses to allow their users 0 fee transactions. This unique and powerful feature of Ardor opens the door for many real life blockchain based applications which were impractical to develop until now.

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