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  • Julie McKenna

Transactions Per Second: A True Test of Blockchain Speed? 

Blockchains vary significantly, and one key metric of differentiation is their transaction processing capacity, commonly measured in transactions per second (TPS). Let's explore what TPS entails, how leading blockchains stack up in terms of TPS, and whether TPS alone provides a complete picture of blockchain speed.

Understanding Transactions Per Second:

Firstly, it’s important to clarify that the term 'transactions per second' might suggest it only pertains to processing financial transactions. This perception originates because Bitcoin, a transaction-only blockchain, processes exclusively transactions in this manner. However, blockchain technology has evolved beyond Bitcoin to now support various applications. Thus, 'transactions' in the blockchain context don't refer only to financial transactions. A 'transaction' in blockchain terminology generally means any operation that can be executed on the blockchain. Using the term 'transactions' helps people grasp and clarify the measurement—it's about the volume of actions processed on the network, regardless of their nature.

Diverse Blockchains, Diverse TPS Rates:

TPS capabilities vary widely among different blockchain technologies. Here are approximate TPS rates for some popular blockchains:

  • Bitcoin: 7-10 TPS

  • Ethereum: 15-30 TPS (excluding Layer 2 solutions)

  • Ripple: 1,500 TPS

  • Avalanche: 4,500 TPS

  • Solana: 65,000 TPS

We would like to highlight a potential upgrade that is being tested for the Avalanche network that will allow it to handle over 100,000 transactions per second. Learn about Avalanche's upcoming upgrades.

Does TPS Paint the Full Picture?

While TPS is an important metric for assessing blockchain performance, it should not be viewed in isolation. One of the most significant challenges facing blockchain technology is scaling—a blockchain network’s capacity to handle an increased number of transactions and support growth without compromising performance, security, or decentralization. Therefore, when evaluating blockchain speed and efficiency, it's essential to consider how well the network manages scaling challenges in addition to its TPS rates. Even if a blockchain boasts a high TPS, lacking effective scaling solutions could lead to diminished performance and increased congestion as transaction volumes expand.

Further points to consider that influence blockchain speed: 

  • Block Time: This refers to the average time interval between the creation of successive blocks on a blockchain. It is an indicator of how quickly new blocks are added to the chain.

  • Finality: This term describes the point at which a transaction or block is considered immutable and irreversible. Finality ensures that past transactions are permanently part of the blockchain and cannot be altered, playing a critical role in the security and trustworthiness of the network.

Stay posted as we delve deeper into these topics in our upcoming blog posts!



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