How Does the Concept of ‘Finality’ Differ in a BFT System versus a Proof-of-Work System?
In a BFT system, finality is absolute and achieved instantly or very quickly once the consensus protocol is completed. Once a block is committed, it cannot be reverted.
Proof-of-Work (PoW) systems, like Bitcoin, have probabilistic finality. A transaction is considered final after a certain number of subsequent blocks have been mined (e.g. six confirmations).
This probabilistic nature means there is always a small, non-zero chance of a chain reorganization and transaction reversal.
Glossar
Instant Finality
Settlement ⎊ Instant Finality, within decentralized systems, denotes the irreversible confirmation of a transaction, eliminating the probabilistic finality inherent in many consensus mechanisms.
Chain Reorganization
Blockchain Fork Resolution ⎊ The process by which a network resolves a temporary divergence in the transaction history, typically resulting in the abandonment of the shorter chain in favor of the one with greater cumulative proof-of-work.
BFT
Mechanism ⎊ Byzantine Fault Tolerance (BFT) represents a critical consensus protocol within distributed systems, notably impacting blockchain technology and cryptographic applications where achieving agreement among potentially faulty nodes is paramount.
Consensus Protocol
Protocol ⎊ Consensus Protocol is the set of deterministic rules and economic incentives that enable a distributed network of independent nodes to agree on a single, valid history of transactions without reliance on a central authority.