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Network Latency Meaning

Network latency in a blockchain context refers to the time it takes for a transaction to be propagated across the peer-to-peer network and confirmed in a block. It is the delay between "Clicking Send" and "Transaction Confirmed." Latency is influenced by the physical distance between nodes (speed of light limitations), the internet connection speeds of the validators, and the specific consensus mechanism of the chain.

For example, Bitcoin has a 10-minute block time, meaning high latency for finality. Solana aims for sub-second block times, offering low latency.

For High-Frequency Traders (HFT) and Arbitrageurs, latency is the enemy. They often pay for premium infrastructure to be geographically closer to the major validator nodes ("Co-location") to shave milliseconds off their trade execution time.

In a volatile market, a latency delay of 2 seconds can mean the difference between a profitable trade and a loss.

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