008 | Finality in Blockchain Consensus | Programmer Explain
The record of sending crypto written on the ledger is probabilistic? It means the transaction that you saw might be moved with chance.
Bitcoin transactions are probabilistic. It means the succeed transaction that you saw might disappear.
Today, I purchased a cup of coffee by swiping a credit card, the vendor felt comfortable giving me the coffee in exchange for the amount I paid.
The vendor was certain that the transaction went through and it would not later be reverted because the purchase was finalized.
In the Bitcoin setting, finality is the affirmation that your transaction was written on the ledger in the Bitcoin network. However, the transaction might be reverted by with 51% attacks. Therefore, we can say Bitcoin offers probabilistic finality.
51% attacksA malicious actor is able to accumulate 51% of mining power, they can conduct a 51% attacks
Two Types of Finality
It refers to the type of finality provided by chain-based protocols (eg. Bitcoin’s Nakamoto consensus), in which the probability that a transaction will not be reverted when more blocks are appended after that transaction.
This is why it is recommended to have more than 6 blocks appended to the block that the transaction is included.
This refers to the type of finality provided by PBFT-based protocols (eg. DEXON), in which a transaction is immediately considered finalized once it is included in a block and added to the blockchain.
In this case, a leader will propose a block, and a sufficient fraction of a committee of validators will have to approve the block for it be committed.
In order for a real-world business adoption, absolute finality is important because no one wants to take the risk of having assets that might not be theirs because of what a protocol was designed.