Great follow up question, thank you. I could talk about this "topic" for days, so I appreciate the opportunity to expand. :)
Let's imagine ourselves as a couple of engineers at Acme Foreign Exchange House. We'd like to track Acme's net cash position across multiple currencies, and execute trades accordingly (e.g., heding). And we'd like to retrospectively analyze our hedges, to assess their effectiveness.
Let's say I have this set of transactions (for accounts A, B, C, D, E, F, etc.)
A1 -> A2 -> A3 -> A4
B1 -> B2 -> B3 -> B4
C1-> C2
D1 -> D2 -> D3 -> D4
E1 -> E2
F1
Let's say that that:
- E1 was a deposit made into account E for $2M USD.
- E2 was an outgoing transfer of $2M USD sent to account F (incoming £1.7M GBP at F1).
If we consume our transactions and partiton our consumption by account id, we could get into a state where E1 and F1 are reflected in our net position, but E2 isn't. That is, our calculation has both $2M USD and £1.7M GBP, when in reality we only ever held either $2M USD or £1.7M GBP.
So what could we do?
1. Make sure that we respect causality order. I.e., there's no F1 reflected in our net position if we haven't processed E2.
2. Make sure that pairs of transactions (e.g., E2 and F1) update our net position atomically.
Opinion: the world is causally ordered in arbitrary ways as above. But the tools, frameworks, and infrastructure more readily available to us struggle at modeling arbitrary partially ordered causality graphs. So we shrug our shoulders, and we learn to live with the edge cases. But it doesn't have to be so.
Let's imagine ourselves as a couple of engineers at Acme Foreign Exchange House. We'd like to track Acme's net cash position across multiple currencies, and execute trades accordingly (e.g., heding). And we'd like to retrospectively analyze our hedges, to assess their effectiveness.
Let's say I have this set of transactions (for accounts A, B, C, D, E, F, etc.)
A1 -> A2 -> A3 -> A4
B1 -> B2 -> B3 -> B4
C1-> C2
D1 -> D2 -> D3 -> D4
E1 -> E2
F1
Let's say that that:
- E1 was a deposit made into account E for $2M USD.
- E2 was an outgoing transfer of $2M USD sent to account F (incoming £1.7M GBP at F1).
If we consume our transactions and partiton our consumption by account id, we could get into a state where E1 and F1 are reflected in our net position, but E2 isn't. That is, our calculation has both $2M USD and £1.7M GBP, when in reality we only ever held either $2M USD or £1.7M GBP.
So what could we do?
1. Make sure that we respect causality order. I.e., there's no F1 reflected in our net position if we haven't processed E2.
2. Make sure that pairs of transactions (e.g., E2 and F1) update our net position atomically.
This is otherwise known as a "consistent cut" (see slide 25 here https://www.cs.cornell.edu/courses/cs6410/2011fa/lectures/19...).
Opinion: the world is causally ordered in arbitrary ways as above. But the tools, frameworks, and infrastructure more readily available to us struggle at modeling arbitrary partially ordered causality graphs. So we shrug our shoulders, and we learn to live with the edge cases. But it doesn't have to be so.