What is transactions per second (TPS) in crypto?

Transactions per second (TPS) is a critical performance metric in the cryptocurrency and blockchain ecosystem. As digital currencies continue to evolve and seek to address real-world payment challenges, understanding TPS becomes essential for both users and developers. This metric directly impacts user experience, network efficiency, and the overall viability of blockchain networks in competing with traditional financial systems like VISA, which processes thousands of transactions per second.

What is transaction per second (TPS)?

Transactions per second (TPS) is a fundamental performance indicator that measures the number of transactions a blockchain network can process within a single second. This metric varies significantly across different blockchain networks and serves as a key benchmark for evaluating network performance against traditional payment processors.

Blockchain networks typically exhibit two distinct TPS measurements: average TPS and maximum TPS. The average TPS represents the network's capacity under normal operational conditions with regular transaction demand. In contrast, the maximum TPS indicates the network's peak performance capability during periods of high activity, such as during significant price movements or market volatility when numerous users simultaneously execute transactions. This distinction is crucial because network congestion can substantially reduce real-time TPS, affecting transaction processing times and user experience.

For context, Bitcoin, despite being the largest and most well-known cryptocurrency, maintains one of the lowest TPS rates in the industry, averaging approximately five transactions per second with a maximum of seven. This relatively low throughput reflects Bitcoin's design priorities, which emphasize security and decentralization over transaction speed. In comparison, centralized payment systems like VISA can process over 65,000 transactions per second, highlighting the substantial performance gap between traditional financial infrastructure and many blockchain networks. Understanding VISA transactions per second provides important context for evaluating blockchain performance capabilities.

What does TPS mean for blockchain network speed?

The TPS metric is intrinsically linked to blockchain network speed and overall performance. While TPS indicates the volume of transactions processable per second, it works in conjunction with another critical metric: transaction finality time. Transaction finality time measures the duration required to confirm and permanently record a transaction on the blockchain, ensuring it cannot be reversed or altered.

Bitcoin's performance illustrates these concepts clearly. With an average TPS of five to seven transactions per second, Bitcoin requires a minimum of one hour to achieve transaction finality. This extended confirmation time, combined with low throughput, has prompted numerous proposals for improvement over the years. Suggestions have included increasing Bitcoin's block size and implementing consensus mechanism enhancements. However, the Bitcoin community has generally resisted such changes, preferring to maintain the network's original architecture and principles.

In contrast, Ethereum has demonstrated the potential for significant TPS improvements through technological innovation. Originally capable of processing 15 TPS, Ethereum underwent a major upgrade, transitioning from a Proof of Work to a Proof of Stake consensus mechanism. This transformation is believed to enable the network to handle between 20,000 and 100,000 TPS, representing a dramatic increase in processing capacity and bringing blockchain networks closer to VISA transactions per second benchmarks.

Do blockchain transaction speeds matter?

In today's fast-paced digital economy, transaction speed has become a critical factor for blockchain network success. Users increasingly expect quick, seamless transactions comparable to traditional payment systems like VISA, making the adage "time is money" more relevant than ever. As the cryptocurrency industry has grown to serve millions of users worldwide, the importance of achieving high TPS rates similar to VISA transactions per second has intensified correspondingly.

High TPS rates are essential for preventing network congestion, which occurs when transaction demand exceeds processing capacity. Network congestion forces transactions to wait extended periods for processing, degrading user experience and potentially undermining confidence in the network. This issue becomes particularly acute during periods of high market activity.

Transaction fees add another dimension to this discussion. Cryptocurrency transactions typically incur relatively low fees, making them potentially more cost-effective than traditional banking solutions. However, during periods of network congestion, users often increase their transaction fees to prioritize their transactions for faster processing. This behavior can create a problematic cycle where rising fees become the norm, potentially pricing out users who cannot afford higher costs. This dynamic underscores why TPS is a crucial metric for blockchain viability.

Furthermore, TPS directly impacts blockchain scalability—the network's ability to accommodate growing user demand and transaction volumes. As cryptocurrency adoption continues to expand, networks must increase their TPS capacity to handle additional load without experiencing performance degradation. This scalability challenge requires networks to maintain both adequate average TPS for regular operations and sufficient maximum TPS to handle peak demand periods without congestion, ideally approaching the efficiency of VISA transactions per second.

Which cryptocurrency networks are the fastest?

Recognizing Bitcoin's scalability limitations, developers have created numerous blockchain networks designed to achieve significantly higher TPS rates that can better compete with traditional payment processors like VISA.

Solana stands as one of the most performant blockchain networks available. According to its whitepaper, Solana theoretically supports up to 710,000 TPS. While this represents an ideal scenario, the network has demonstrated impressive real-world performance, achieving 65,000 TPS during testing, with developers confident it could reach 400,000 TPS under optimal conditions. Real-world data shows Solana has recorded maximum daily average TPS exceeding 1,000, while maintaining a block finality time of approximately 21 to 46 seconds—a dramatic improvement over Bitcoin's one-hour minimum and approaching traditional payment network speeds.

SUI represents another high-performance Layer-1 blockchain solution. The network achieves impressive daily average TPS rates, while claiming capability of up to 125,000 TPS. SUI achieves these speeds through parallel processing by validators, which maximizes throughput, reduces latency, and enhances scalability. The network further optimizes performance through efficient transaction handling, featuring rapid completions and individual transaction validations.

BNB Smart Chain (BSC) also ranks among the fastest networks, with real TPS speeds reaching several hundred transactions per second. BSC offers smart contract functionality and maintains compatibility with the Ethereum Virtual Machine, providing users access to Ethereum's extensive ecosystem of decentralized applications and development tools while delivering superior transaction speeds.

Beyond these leading networks, Ethereum deserves special recognition following its upgrade to Ethereum 2.0. The transition increased Ethereum's maximum TPS from 12-15 to a potential 100,000—a remarkable achievement for such a widely used blockchain. This improvement is particularly significant given Ethereum's role as the foundation for countless smart contracts and decentralized applications, which generate substantial transaction volume. These advancements bring blockchain technology closer to matching VISA transactions per second capabilities.

XRP, created by Ripple, presents another noteworthy case. Operating on RippleNet rather than a traditional blockchain, XRP can handle up to 50,000 TPS, substantially exceeding traditional financial networks. While Ripple has faced discussions regarding centralization concerns, its network remains among the fastest available for cross-border payments and transactions, demonstrating performance comparable to VISA transactions per second in certain scenarios.

Conclusion

Transactions per second represents a vital metric in the cryptocurrency ecosystem, directly influencing user experience, network scalability, and the competitive viability of blockchain networks against traditional financial systems like VISA. As demonstrated by the evolution from Bitcoin's modest 5-7 TPS to networks like Solana and SUI achieving thousands of transactions per second, the blockchain industry has made remarkable progress in addressing speed and scalability challenges.

The ongoing pursuit of higher TPS rates reflects the industry's commitment to meeting growing demand as cryptocurrency adoption continues to expand globally. The benchmark of VISA transactions per second—processing over 65,000 transactions per second—remains an important reference point for blockchain developers seeking to create networks capable of mainstream adoption. While different networks have adopted various approaches to achieving high throughput—from consensus mechanism innovations to parallel processing architectures—the advancements collectively demonstrate that technical solutions exist to accommodate future growth.

As the cryptocurrency industry matures and user bases expand, the ability to maintain high TPS rates comparable to VISA transactions per second while preserving security and decentralization will remain crucial for long-term success and sustainability. The networks that successfully balance these priorities will likely emerge as the infrastructure supporting the next generation of digital finance, bridging the gap between blockchain technology and traditional payment processing speeds.

FAQ

What crypto can do 100,000 transactions per second?

Currently, no cryptocurrency can achieve 100,000 TPS. Ethereum aims for this through scaling solutions like Layer 2 and sharding in its future roadmap.