What Is the Difference between “Probabilistic Finality” and “Absolute Finality” in Blockchains?
Probabilistic finality, typical of PoW chains, means a transaction is considered final with a high probability that increases with each subsequent block. It is never 100 percent certain, but the cost of reversal quickly becomes prohibitive.
Absolute finality, common in PoS and BFT-style chains, means that once a transaction is confirmed, it is mathematically guaranteed to be irreversible, often within seconds. This difference is critical for high-value financial applications.
Glossar
Byzantine Fault Tolerance
Fault Tolerance ⎊ Byzantine Fault Tolerance describes the network characteristic ensuring that a distributed system, like a blockchain, can continue to reach consensus and maintain a correct state even when a certain fraction of its nodes behave maliciously or fail unpredictably.
Cost of Reversal
Metric ⎊ The Cost of Reversal represents the quantifiable economic and computational expenditure necessary to successfully execute a transaction reversal on a distributed ledger, typically measured in terms of network resources or financial stake.
Finality
Assurance ⎊ Finality represents the definitive assurance that a confirmed transaction on a distributed ledger is irreversible and cannot be cryptographically or economically challenged.
Absolute Finality
Settlement ⎊ Absolute finality, within cryptocurrency systems, denotes the irreversible confirmation of a transaction on a distributed ledger, eliminating the possibility of reversal or alteration.