What Is a “Single Point of Failure” in an Operational Process?

A single point of failure (SPOF) is a part of a system or process where, if that part fails, the entire system or process stops working. In physical settlement, an SPOF could be a single server holding the private keys or a single individual authorized to approve the final transfer.

Eliminating SPOFs through redundancy and multi-signature processes is key to operational resilience.