Block-By-Block Settlement

Definition ∞ Block-By-Block Settlement signifies the finalization of transactions as each new block is added to a blockchain. This process confirms the immutable recording of digital asset transfers or smart contract executions within the distributed ledger. Each block’s inclusion solidifies the state of the network at that specific point, rendering prior transactions irreversible and cryptographically secured. This sequential finality is a core attribute of many decentralized systems.
Context ∞ The discussion surrounding Block-By-Block Settlement often centers on the trade-off between transaction finality and network scalability. While immediate settlement offers strong security assurances, it can limit throughput on some blockchains, leading to higher fees or slower processing times during peak demand. Future innovations in layer-2 solutions and sharding aim to optimize this settlement model, preserving its security benefits while significantly improving transaction capacity for broader adoption.