Good morning.
I’m Mitsui, a web3 researcher.
Every Saturday and Sunday afternoon, we’ll deliver articles explaining basic vocabulary. We aim to keep each article concise enough for a quick read, while also making them suitable for revisiting and studying.
Today’s topic is “Finality.”
Please watch until the very end!
The unfamiliar term “finality”
The term “Finality” refers to the concept translated in Japanese as “最終確定性” (sōgō kōtei-sei). In other words, it means that a transaction has reached a state where it can no longer be reversed and is now finalized.
In the context of Web3, the concept of finality is extremely important. This is because one of the defining characteristics of blockchain is that “once recorded, transactions cannot be altered.”
But when does this “tamper-proof” property actually begin? At what point can users say, “This transaction is complete; the money has truly moved”? The concept needed to understand this is finality.
“Finality” in the existing financial system
To understand finality, it is useful to know how “settlement” is handled in existing financial systems.
