Settlement
Settlement is the transaction or exchange of securities between two or more parties.
Settlement is the transaction or exchange of securities between two or more parties. Traditional settlement involves the physical movement of certificates, transfer forms, or checks. Traditional settlement provides finality to a transaction, but has an increased risk of theft, loss, or forgery.
Most settlements in modern financial systems are electronic settlements, typically taking place through an electronic funds transfer. Electronic settlement involves a direct settlement between participants, although if a non-participant is involved in the transaction, it will require a custodian to oversee the settlement. Unlike physical settlements, electronic settlements might not be final for days or weeks.
Bitcoin unites the finality of physical settlement with the convenience of digital assets. Like physical cash or gold, Bitcoin payments are settled with absolute finality once they are included on the blockchain. The finality and immutability of Bitcoin transactions are the main reason Satoshi Nakamoto referred to Bitcoin as a “peer-to-peer electronic cash system” in the Bitcoin whitepaper.
Settlement is a concept relevant to Bitcoin, finance, or blockchain technology that investors should understand. Onramp's comprehensive Bitcoin glossary provides clear explanations of Settlement and hundreds of other terms to support informed investment decisions.
Frequently Asked Questions
What is Settlement?
Settlement is a term used in Bitcoin, finance, or blockchain technology. Understanding Settlement helps investors and enthusiasts build a stronger foundation of knowledge about digital assets and financial markets.
Why is Settlement important?
Settlement is relevant to understanding how Bitcoin, financial markets, or blockchain technology operates. Knowledge of such concepts helps investors make better-informed decisions about their portfolios.
Where can investors learn more about Settlement?
Onramp's Bitcoin glossary offers detailed, accessible explanations of Settlement and over 500 other terms related to Bitcoin, finance, and blockchain technology for investors at all experience levels.
