Understanding The Finality Of Cardano Transactions

Cardano’s Ouroboros PoS uses probabilistic finality, where a block is considered final when enough blocks have been appended behind it. How many blocks must be appended and what happens to the transaction after the user submits it to the network? In the article, we will explain the concepts of transaction latency and finality.

Transaction Story

Alice wants to send Bob 10 ADA. Let’s describe what happens with a transaction from creation to block finalization.

Alice creates a transaction in her wallet or application. This involves specifying the details of the transaction, such as Bob’s address and the amount of ADA to be transferred.

Alice must sign the transaction with her private key. If she uses a HW wallet, she must confirm the transaction by holding down a button, for example. This provides proof of authenticity and ensures that only the owner of ADA coins can initiate a transaction.

The signed transaction is broadcast to the Cardano network. It is picked up by Cardano nodes, which validate the transaction according to the protocol rules.

Once the transaction is validated, it is added to a pool (mem-pool) of valid transactions waiting to be included in a new block.