Talking about blockchain speed and scalability is impossible without using the term “transactions per second (TPS)” – read ahead to find out what it means.
What Is “Transactions Per Second” (TPS)?
The transactions per second (TPS) definition is as straightforward as can be. This term refers to the number of transactions that a network can process each second.
If a blockchain can facilitate a high number of TPS, this usually means that its smart contracts and dapps will also work in a fast and efficient way.
What You Need To Know About Transactions Per Second (TPS)
The development of solutions for boosting the transactions per second (TPS) rate of blockchains is important for increasing their potential to scale up. This is due to the fact that decentralized networks need to catch up in speed with conventional payment systems to achieve mass adoption.
Here’s a comparison of how many transactions per second (TPS) different networks can handle:
- Visa – up to 24,000 TPS
- Mastercard – 5,000 TPS
- PayPal – 193 TPS
- Bitcoin – 7 TPS
- Ethereum – 20 TPS
- Litecoin – 56 TPS
As you can see, there is a dramatic gap between the number of transactions per second (TPS) hosted by card networks and their decentralized counterparts. This could get you wondering why blockchains don’t implement these existing solutions that could help them increase the transaction speed.
The truth is that the solution for decentralized networks should not only be able to handle a higher number of transactions per second (TPS) but also maintain all the other desirable properties of blockchain, such as accessibility, low fees, and autonomy.
Thus, when you come across a blockchain with a TPS that is higher than average, remember that it doesn’t necessarily mean that it’s superior to other platforms, as speed could be achieved by sacrificing other important aspects of the network.
