Define “Finality” in the Context of Blockchain Transactions

Finality refers to the guarantee that once a transaction is recorded on the blockchain, it cannot be reversed, altered, or canceled. In Proof-of-Work systems like Bitcoin, finality is probabilistic, increasing with the number of blocks added on top of the transaction.

A transaction is considered practically final after a certain number of confirmations (e.g. six blocks). In some Proof-of-Stake systems, finality is deterministic, meaning once a block is finalized by the protocol, it is mathematically impossible to reverse.