The development of blockchain technology and cryptocurrency in general have everything to do with the inadequacies of the current financial system. Consumers are sick and tired of the long wait times associated with transactions or payment validations along with sky-high transaction fees. Blockchain and cryptocurrency have been able to overcome these issues within a rather short timeframe.
For example, blockchain transactions are able to be validated 24 hours a day, seven days a week. They often process within seconds or a few hours at most. When you compare this to the waiting periods of 3 to 5 business days for most cross-border transactions, blockchain technology is leaps and bounds better than what more traditional financial systems currently use.
Also consider the fact that a “financial middleman” is no longer needed. This lowers the transaction costs considerably. The inherent decentralization of cryptocurrency means that there is no central hub where the transactional information is stored. This ensures that there is no single company or group that controls cryptocurrency. Due to this fact, cyber criminals can never bring a digital currency to its knees.
Which cryptocurrency is the fastest?
Regardless of how efficient or cost effective blockchain technology is when compared with our current financial systems, if it doesn’t have the ability to exceed current network transaction speeds, then blockchain could struggle to break new ground.
I’ve taken data from various reliable 3rd party data sets (conducted by HowMuch and CoinAnalysis) in order to compare the transaction speeds of some of the largest cryptocurrencies by market cap in relation to other well-known payment providers like Visa and PayPal. Each cryptocurrency (or payment network) is ranked from largest to smallest based on the number of transactions are processed per second.
NOTE — This study was completed by 3rd party providers and in no way reflect the smaller market cap cryptocurrencies which release newer and faster tps everyday (some substantiated and others are not). We will continue to list the latest currencies below under “worth mentioning” as they gain more momentum and acceptance among the crypto community.
The info graphic below represents these transactions in relation to the size of the balloons. This will allow you to clearly view how some of the most popular cryptocurrencies compare to more traditional payment methods.
Top 3: Ripple, Bitcoin Cash, and Litecoin
Although Visa has the fastest transactions over any payment network at 24,000 transactions per second (tps), it’s surprising to see that Ripple actually comes in 2nd, above PayPal by 1307 tps. This shows the viability of Ripple in having the capacity to be a payment solution provider on a much larger scale.
PayPal is still the most popular and well-known digital peer-to-peer platform, however Ripples transaction speed could be the key to its rise as the next generation peer-to-peer payment platform provider. It’s not only faster, but much cheaper and secure as well.
Bitcoin Cash is the second fastest cryptocurrency according to tests. It can handle up to 61 transactions per second (on average). However, it does have a blockchain size issue. For more on this issue I highly recommend you check out this article.
Coming in at a close third, is Litecoin at 56 transactions per second. I don’t think too many of you are surprised that this would rank in the top five. This coin has always been known as one of the faster and lightweight cryptocurrencies (hence the name). Litecoin has an average speed of 30 minutes and a maximum capacity of 56 transactions per second. Not only is it fast, but the cost of each transaction are some of the lowest in the crypto sphere.
Dash comes in at 4th place with 48 transactions per second. The average transaction speed for this cryptocurrency is at around 15 minutes. As the name suggests, this cryptocurrency has been created for the primary purpose of speeding up transactions that have been lagging, like Bitcoin. They are also have very low transaction fees.
In 5th place, we have the ever popular Ethereum. The second most well regarded cryptocurrency has an average transaction speed of six minutes and their maximum capacity is at 20 transactions per second. This cryptocurrency is not only known for its speed but also having the additional smart contracts feature, which has been used for multiple purposes within the crypto sphere. As an open source platform, Ethereum has been a fundamental staple of the crypto ecosystem, which has become the foundation for 100s of other altcoins.
In sixth place, it’s not a shock to see that Bitcoin is bringing up the rear. Cryptocurrency traders are consistently hit with transaction delays when transferring Bitcoin as their expanding popularity seems to outpace their networks processing capabilities. However, the lightening network hopes to change this fundamental flaw.
Payments within this network will no longer have to worry about block confirmation times. It’s enforced by blockchain smart contracts which will no longer have to create an on-blockchain transaction for payments. Payment speed for this network is measured in milliseconds to seconds.
The Lightening Network has not yet been fully adopted by all exchanges and crypto wallets as it’s still in its beta version at the time of this release. I will update changes to this article regarding Bitcoin’s speed, as the network gains more acceptance and is thoroughly tested through various trials.
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Other Fast Cryptos Worth Mentioning
EOS — has recently blown transaction times out the water with it’s almost near instant processing time and has broken records as it nears 3,000 transactions per second. So far, it’s at an all time high of 2822 TPS.
The network has surpassed many other popular crypto coins like BTC, ETH, XRP at the time of this release. It will be interesting to see how it fairs against the amount of traffic that these more popular and widely used coins get on a daily basis.
*The latest speed was confirmed via Monitor.io, a data-speed checking website.
NEO — reported average transactions of 15 seconds and comes with a more streamlined PoS protocol which is able to offer one 1,000 transactions per second.
Stellar — average transaction speeds are at around 5 seconds. The transaction cost is extremely low at 0.00001 lumens per transaction. The Stellar development team claims the network can easily handle 1,000 transactions per second.
Steem — the reported average transaction speed is three seconds and doesn’t require you to pay transaction fees due to the technology that the platform uses, called Graphene.
Cardano — has an average transaction speed of approximately five minutes. All nodes within its network can accept transactions and verify them.
IOTA — reported average transaction speeds are at three minutes as IOTA currently has no daily limitations as well as transaction fees. It reportedly gets faster as you throw more at it.
A Closer Look at the Results
I’m sure the first thing you’ll notice about the test results is how far ahead Visa is from the rest of the competition. Keep in mind that Visa has had many decades to adapt and upgrade their payment system infrastructure which leaves it to its final transaction rate of 24,000 transactions per second. I highly doubt that rate will be challenged anytime soon. However I’m fairly certain that cryptocurrency will far surpass this number in the near future.
What also might have come as a shock to you is the speed that Ripple was tested at in relation to PayPal, as well as the rest of its peers. Ripple’s more than 6X the speed of PayPal at 1,500 transactions per second. That’s saying a lot considering how new Ripple is to the market and how much older and developed PayPal is. What’s even more astonishing is that Ripple’s transaction fees come in at just a fraction of a cent, which makes it significantly more cost-effective than PayPal.
On the other side of the spectrum, Bitcoin and Ethereum seem to perform rather poorly at a mere 20 transactions per second. However you have to keep in mind that they are the most popular blockchain (and cryptocurrency) in the world. They are being used and scaled considerably more than Ripple or Dash. While it doesn’t necessarily excuse slow transaction times, the popularity between these two coins help explain the gap between its competitors.
Concerns Over Popular Blockchain Speeds
One of the biggest concerns regarding the emergence of blockchain technology is how well they perform once their traffic is fully ramped. Bitcoin and Ethereum are much slower than PayPal and Visa as a result of being an extremely popular destination for cryptocurrency users.
Although Ripple may be substantially faster now, the future speeds of this cryptocurrency remains unclear as we’ve yet to see what happens when it really gets put to the test with numerous banking clients and other real world applications.
Blockchain has yet to be fully tested with more large-scale, real-world scenarios, so it would be foolish, at this time to assume that it could keep up with more traditional payment networks. Very few would argue that blockchain technology has real-world, game changing potential.
Until recently, we’ve seen many billion dollar corporations and banks patent and utilize the technology for small-scale operations. Only the future will tell if blockchain can handle larger, industrial sized traffic.
The Future of Cryptocurrency Transaction Speed
Potential solutions like the Lightening Network promise to enhance transaction speeds for Bitcoin, Litecoin, and a handful of other massive cryptocurrencies to breakthrough numbers. The teams behind the coins listed above are constantly developing new solutions to scale transactions per second at an exponential rate.
These solutions are still being rolled out and tested. Many scaling solutions are “second layer” and offer the use of fewer validator nodes to complete transactions, which arguably pushes crypto closer to centralization.
However, coins like Zilliqa and Nano, along with off-chain scaling solutions like the Raiden Network proclaim that they will completely change the game. With their almost instant, low fee, scalable payment system, that’s complementary to the Ethereum blockchain, this will soon enhance new protocols for future cryptocurrency transaction speeds.