Transactions Per Second
Transactions Per Second (TPS) is a measure of a blockchain's scalability, indicating the number of transactions it can process per second. The TPS rate varies among blockchains, depending on their design and approach to security and scaling. A high TPS rate is crucial for global adoption and mass usability of a blockchain.
1.1 Bitcoin (BTC)
Bitcoin (BTC) currently has an on-chain speed maxing out at around 7 transactions per second. To improve this, Bitcoin (BTC) is experimenting with off-chain solutions like the Lightning Network.
1.2 Bitcoin Cash (BCH)
Bitcoin Cash (BCH) has seen a maximum on-chain speed of around 80 transactions per second, but its limits haven't been hit yet, so the maximum may be much higher.
Visa, a centralized payment system, averages around 2,000 transactions per second, and can handle more than 24,000 transactions per second at peak times.
TPS is a significant factor in the performance and usability of a blockchain. A higher TPS allows for more users to use the blockchain simultaneously without experiencing delays, making it more suitable for widespread adoption.
Ethereum, with its transition to Ethereum 2.0 and introduction of sharding, aims to significantly increase its TPS to accommodate more users and complex applications on its network.
Achieving a high TPS often involves trade-offs in terms of decentralization and security. Some blockchains may opt for a more centralized model to increase TPS, while others may prioritize decentralization and security over high TPS.
EOS, for example, achieves higher TPS by using a delegated proof-of-stake (DPoS) consensus mechanism, which involves a degree of centralization.
* All terms and definitions may update as the Cryptionary improves.