Homework on Finality - Questions

Blockchain and Bitcoin 101
#2090

  1. What do we mean when we say that blockchain has transaction finality/immutability?
    We mean that the transaction cannot be reversed, or at least very very difficult to do so.

  2. How does this lead to the trustless environment that blockchain creates?
    It leads to a trust-less environment as the counterparty cannot reverse transactions it decides to for any reason it sees fit. All transactions are 100% verifiable on the public blockchain that everyone can access.

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#2091
  1. Blockchain transaction finality means the data cannot be changed or reversed, itā€™s final.
  2. Blockchain creates a trustless environment by removing trust from the parties involved in the transaction and transferring it to the network.
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#2092

  1. You are unable to reverse a transaction once it has been confirmed.

  2. If you are an honest business selling quality products the customer canā€™t reverse the payment after they have received the product.

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#2093

  1. What do we mean when we say that blockchain has transaction finality/immutability?
    Answer: When we say that blockchain has transaction finality/immutability, we mean that once a transaction occurs, its on the blockchain forever and cannot be reversed. These transactions can be verified mathematically and cannot be altered.

  2. How does this lead to the trustless environment that blockchain creates?
    Answer: Blockchain creates a trustless environment through removing trust between individuals and creating it through the network. Because blockchain transactions can be verified mathematically and cannot be altered, users do not need to trust strangers and their actions or intentions like traditional commerce or e-commerce. Once a transaction is confirmed through the blockchain, it is permanent.

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#2094
  1. Finality in block chain means that once a transaction is verified it cannot be be reversed, it is final.
    2.The trustless enviroment is achieved thru mathematics and verification. Once verification is made the transaction cannot be reversed in any way. The transaction is complete.
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#2095

What do we mean when we say that blockchain has transaction finality/immutability?
Transactions cannot to reversed or disputed. Once a transaction is made, it is final.

How does this lead to the trustless environment that blockchain creates?
It enables trust of the network and removes the trust between strangers which reduces the chance of fraud and scamming.

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#2096

  1. Once a transaction has been made and it was confirmed in several blocks (usually 6 blocks / 1 hour or more is considered to be final), no one can make changes to it or reverse the transaction. In theory, any miner who would like to do that, would need 51% or more of the total hashing power of the network to convince nodes and other miners to adopt the altered version of the ledger. Bitcoin protocol incentives are such that it is much more profitable to just use such huge processing power to mine more Bitcoin (thus further securing the network) than to attempt to make money by trying to fool the rest of the network.

  2. Since there is no central authority that can reverse a transaction, both counterparties in any transaction only have to trust the code of the bitcoin protocol instead of each other.

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#2097
  1. What do we mean when we say that blockchain has transaction finality/immutability?
    Since it canā€™t be reversed and will be in the blockchain forever.
  2. How does this lead to the trustless environment that blockchain creates?
    You donā€™t need to trust the other party, you know that the transaction happened (no chargeback, no arguing that it never happened).
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#2098

Very detailed answers Michael! Keep up the great work. :raised_hands:

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#2099

1- Once a transaction has been accepted and included in a block on the chain, it becomes permanent - it canā€™t be reversed or undone etc.
2- There is no central authority to turn to (in order to reverse / chargeback a transaction for example - it cannot be done), only miners and participants, transaction finality and immutability is one of the major factors contributing to the trustless environment for all.

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#2100
  1. What do we mean when we say that blockchain has transaction finality/immutability?
    Once transactions have been verified on the blockchain, transactions cannot be reversed and are public forever.
  2. How does this lead to the trustless environment that blockchain creates?
    Since transactions cannot be reversed, vendors do not need to worry about ā€˜trustedā€™ third parties (banks) reversing transaction, etc.
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#2101

  1. Transactions cannot be reversed. Once bitcoin moves from one wallet to another, the transaction is recorded on the blockchain forever.

  2. Provides confidence that when you are paid bitcoin, that bitcoin is truly yours and will not be taken from you by a third party (like a bank).

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#2102

  1. What do we mean when we say that blockchain has transaction finality/immutability?
    once confirmations on the transactions are sent it canā€™t be reversed. Just like an accounting ledger, all the previous transaction data never changes. A new transaction is entered in the ledger for any future changes.

  2. How does this lead to the trustless environment that blockchain creates?
    Because blockchain verifies the transactions and blocks itself without the need of a third party been involved.

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#2103

Bitcoins donā€™t exist in a wallet, you only hold the keys there. The coins are actually just values in unspent outputs that you can use on the blockchain :slight_smile: you will learn about this as you progress through the course :wink:

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#2104

  1. What do we mean when we say that blockchain has transaction finality/immutability?
    When a transaction is made it is final and on the blockchain forever. It cannot be recalled or altered.

  2. How does this lead to the trustless environment that blockchain creates?
    Once the transaction is made even between strangers it is final and cannot be recalled or charged back taking away trust.

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#2105

The blockchain is final. That is it. Once the transaction goes through, it cannot be reversed. While this may be true, I would like to say that a blockchain company could have a policy of returns and simply send back bitcoin to customers. Maybe it canā€™t be forceably done, but it can still be done.

As a realtor, trust is a big deal. Landlord arenā€™t happy if you put a bad tenant in their home and it can ruin a client relationship. I hardly ever know anyone that comes to rent my apartments. To gain trust, I check their credit, landlord references, work references, pay stubs, criminal background, eviction background. After I review all that, if they pass everything, I accept that. However, even after all that, they sometimes still screw up somehow. I can definitely see how, a trustless system could be considered preferable to the above scenario.

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#2106
  1. What do we mean when we say that blockchain has transaction finality/immutability? Once there have been confirmations the transaction can not be reversed
  2. How does this lead to the trustless environment that blockchain creates?You donā€™t even have to trust strangers. No one can pull one over on you because there can be no chargebacks
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#2107

  1. Once transactions have been confirmed by the network as sent then there is no possible way to undo this transaction. It is carved into the stone, the concrete has set firm and cemented the transaction in place. There is nobody to call to say it was a mistake to reclaim it.

  2. This leads into the trustless-ness because you and the whole network know exactly who had the funds, what transaction happened and now who has those funds. Nobody can intervene and push the funds off course, nobody can reverse the transaction and the transaction is final and all parties know this and the network has the consensus to prove it so which can be readily checked on the public ledger.

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#2108
  1. What do we mean when we say that blockchain has transaction finality/immutability?
    Once a transaction is entered onto the blockchain, there is no way to reverse it. The means for scammers is eliminated.
  2. How does this lead to the trustless environment that blockchain creates?
    You do not need to rely on anyone to tranact. The Protocol assumes the trust.
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#2109
  1. Finality/immutability means transactions that happen on the blockchain are final and irreversible.
  2. Miners which are incentivized to verify those irreversible transactions create a trustless environment by the reliance on code/math/physics. Miners using computing power to verify if transactions fit the blockchain model.
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