- Blockchain finality is a term that determines the immutability of on-chain transactions and their unchangeable confirmation.
- It specifies the irreversibility of transactions after confirmation and addition to the blockchain.
Blockchain finality is a fundamental concept in the broader blockchain ecosystem. It signifies the point at which a transaction or a block of transactions is confirmed and officially recognized as valid and permanent, rendering it unalterable and irreversible. Immutability is one of the most pivotal aspects of decentralized technology that ensures security and reliability.
The guarantee of unaltered transaction behavior on the blockchain is a crucial safeguard against cyber threats and malicious attacks. While this aspect might seem inflexible to some users, it plays a significant role in establishing the foundational robustness of blockchain technology, enhancing its security and resilience.
What is Finality in Blockchain?
Finality in Blockchain refers to the concept where a confirmed transaction gets added to the blockchain’s distributed ledger and becomes immutable, and irreversible. The duration of achieving transaction finality is important as it specifies or governs how quickly a transaction can be settled and confirmed over the blockchain network. The confirmation time of a blockchain transaction is directly proportional to the network’s promised finality.
For instance, in a blockchain network with anticipated finality, like Bitcoin, the time it takes for a transaction to be confirmed depends entirely on the number of blocks added to the blockchain after the transaction block. This means that as more blocks are added to the blockchain, the level of finality and confidence in the transaction’s permanence increases.
These transaction confirmations can be time-consuming as the network awaits multiple confirmations to ensure a transaction’s irreversibility. The crypto exchanges wait for 3 to 6 blocks for confirmation of Bitcoin transactions. This could take up to an hour but it only takes 50 slots in the case of the Ethereum network that takes a few minutes for transaction confirmation.
Significance of Blockchain Finality
Block finality eliminates the risks like double-spending. This term defines the spending of the same cryptocurrency twice or a user’s attempt to alter the transaction history. These malicious attempts are reduced because of finality as it secures the significance of blockchain technology.
Additionally, it ensures the certainty of transactions to assure transaction confirmation to a user. These finalized results cannot be changed or undone. Finality in a decentralized system may look like an easy task but it’s not. A delicate balance is required regarding various factors such as the consensus mechanism, network latency, and the rigidity of the network’s security mechanism.
Several types of block finality can be achieved as it depends on multiple factors, from absolute to probabilistic, and from immediate to economic finality. Each type of finality has its pros and cons as there is a choice between them that depends on certain requirements and aims of the blockchain ecosystem.
Hurdles in the Way to Achieve Block Finality
Whenever a blockchain splits into multiple paths, forking occurs and produces different versions of the transaction history. Divergence is used to put the consensus method to the test, making it more challenging to establish the legitimacy of a version or recognize which one delays finality.
For instance, hard forks often occur as a consequence of disagreements between a specific community and developer team regarding a protocol change. When these disagreements are not resolved, different factions may continue to support proof-of-work (PoW) blockchains, which can lead to a lack of finality as the network remains divided, and transactions might not be confirmed or validated as swiftly or decisively.
Furthermore, Network Latency is another complicated matter that often affects the block finality or transaction confirmation. Time delays in data communication among nodes make it complex to establish a stable network. Delayed network connection can cause transaction and validation errors.
Conclusion
To achieve blockchain finality, all relevant issues must be addressed to secure the robustness of blockchain technology and establish an unchangeable and unaltered ecosystem.