How Does the Latency of Decentralized Computation Affect the Speed of Price Updates?
Decentralized computation requires multiple nodes to fetch data, agree on a consensus price, and then submit the result to the blockchain. This multi-step process introduces latency compared to a single, centralized entity pushing a price.
The network must balance the need for security (more nodes, more checks) with the need for speed (low latency) for real-time applications like derivatives trading.
Glossar
Computation
Derivation ⎊ Computation, within cryptocurrency, options trading, and financial derivatives, represents the algorithmic processes used to determine pricing models, risk assessments, and execution strategies; it’s fundamentally the translation of market data into actionable insights.
Decentralized Computation
Execution ⎊ Decentralized Computation involves executing algorithms or processing data across a network of independent nodes rather than relying on a centralized server infrastructure.