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Finality in Blockchain. Good and Bad.
In this article, we will explore what is Finality in Blockchain and how it can be advantageous or disadvantageous.
What is Finality?
Let us start with a very basic question — What is Finality?
Finality refers to the confirmation of a tx which will not be revoked. For example, if I pay with my credit card at a coffee shop, the tx will not be revoked and the owner will be paid in full.
In Blockchain, finality refers to a tx being confirmed which cannot be revoked or removed arbitarily. This brings confidence amongst the users who can rely on the consensus mechanism. In case of Bitcoin the tx maybe revoked, if a malicious actor is able to accumulate 51% of the stake.
Types of Finality
Probabilistic Finality
The first type is Probabilistic, where the system acknowledges that there can be false confirmations under specific circumstances. Ripple uses this method because it ensures fast transactions but relies on trust instead of Blockchain mechanics to determine validity. In chains like Bitcoin, it is recommended to wait for 6 additional blocks before it is considered as complete.
