Probabilistic Transaction Finality? Blockchain Security? Programmer Explain

What is Probabilistic Transaction Finality and why is it so important for blockchain developer or early adaptor?

Disclaimer

This is a series of explaining security issue that has happen/could happen potentially.

If you are planning to adopt blockchain technology as an entrepreneur, a developer for your business. It is time to dive in common security issues that blockchain technology comes along with.

Why do I need several confirmations when I send fun from one wallet to the other ?

Would it believe me if I told you that the crypto currency/crypto token that I gave you could be changed in the near future? If you are not buying in, let’s dive in how it works!

Why do we need confirmations ?

How Blocks is Chained together

If your transaction is included in 11th blocks , you will have 3 confirmations once 14th blocks is generated base the the 11th blocks .

For Bitcoin, it takes 10 minutes to generate a block for miners.
What if miners who control more than 51% computing power decides to exclude the transaction from the 11th blocks? That means, the history would be changed from block 11th blocks .

However, from a technical perspective, the more blocks were generated, the harder to change the history. That, creates a term called Probabilistic Transaction Finality .

What is Probabilistic Transaction Finality?

Finality is the guarantee that past transactions can never change.

Finality measures how long one has to wait to be given a reasonable guarantee the transaction written in blockchain is irreversible.

Classical Attack

Proof of work system
— 「Selfish mining」
— 「51% Attack」
— 「Double Spend」

Proof of stake system
— 「Nothing at Stake」
— 「Sybil Attack」

Disclosure / Useful Link

Blockchain Link List
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About me
I am a full-stack javascript developer and one of the contributors for NEO blockchain project.

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