Transaction Settlement

Definition ∞ Transaction settlement, in blockchain systems, is the definitive and irreversible completion of a digital asset transfer, where ownership of the assets is formally recorded on the distributed ledger. Once settled, a transaction cannot be reversed or altered, providing finality and certainty to the participants. The speed and cost of settlement are key performance indicators for any blockchain network. This process ensures the integrity and trustlessness of digital asset exchanges.
Context ∞ The efficiency and finality of transaction settlement are critical discussions in the context of blockchain adoption for various use cases, from payments to securities trading. Debates often concern the trade-offs between immediate finality and network decentralization or scalability. Future developments will focus on improving settlement speeds and reducing associated costs through layer-2 solutions and advanced consensus mechanisms, aiming to support high-volume, real-time applications.