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In this article I read that Proof of Work has no Economic Finality.

As I understand concept of economic finality is when for given block B, the consensus algorithm guarantees that if B is finalized, it is not possible to revert it without loosing or burning an X amount of money, (X being very large, billions of dollars for example).

In proof of work systems like Bitcoin, we consider transaction final if it's burried under Y amount of blocks (if I remember correctly it's 6 for btc), because to revert those Y blocks, attacker would need to spend a huge amount of electricity which would be equivalent to that X amount of dollars. so how does this not satisfy an economic finality definition?

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You do understand the economic finality and changing a block that has been finalized would incur an Excessively high cost. The key difference lies in the nature of the finality, In PoW, the economic cost associated with reverting transactions increases with more confirmations, making it practically "final" after a certain point. However in PoS systems with explicit economic finality, the protocol rules directly impose substantial economic penalties for attempting to revert finalized transactions or blocks. Bitcoin PoW system makes reversions economically and improbable after a certain threshold of confirmations.

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  • So the difference is that in case of PoS finality is defined more explicitly? Commented Oct 20, 2023 at 14:50
  • Yes, you're right. PoS has a rigid, rule-enforced finality, while PoW has a practical, economically driven finality based on accumulated computational work. Commented Oct 22, 2023 at 5:25

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