Bite-Sized #2: TPS & Time to Finality
The world of cryptocurrency is a vast and hectic playing field with lots of enthusiasts trying to achieve adoption for their coins, tokens, and dApps. Cryptocurrency is the key use case for blockchain technology, which many have claimed will revolutionize the way money, economies and governance structures work.
Two interrelated properties of blockchains are often used to judge the value/utility of any given ledger:
(1) Transactions per second (TPS) and
(2) Time to finality (TTF).
A lot of hype surrounds TPS figures and time to finality, with many projects making absolutely absurd claims that will never work in practice. But why are TPS and transaction finality so critical?
What is TPS & Transaction Finality?
Let’s keep it simple: imagine a blockchain is a conveyor belt. TPS is the number of things you can put on that conveyor belt. Transaction finality is how fast that conveyor belt is moving.
Therefore, Perlin’s Wavelet ‘conveyor belt’ can hold over 31k+ transactions for each 1-sec block — and each transaction can be finalized in 0–4 seconds. So paying for your coffee using Wavelet is actually possible even if 31k+ other people wanted to pay for their coffees at that same instant (meaning you’re not sitting there waiting at the cash register for your payment to approve). For context, Visa only processes an average of 2k TPS on any given day, with a peak of 4k during busy periods.
TPS and transaction finality also play an important role in the scalability of the blockchain. The higher the TPS and faster the finality, the more scalable the blockchain is due to the more enhanced processing and handling of transactions.
As said before, there are many players in the crypto market and with their different approaches for their projects, they have different TPS to reflect on their approach.
As shown in the table above, one of the biggest players in the market, Bitcoin, has a TPS of only 7. Some other names include Ethereum, with a TPS of 15, and EOS, with a TPS of 3,000. On a side comparison, a non-crypto organization, VISA, claims to have a TPS of 24,000, although it is just a claim and hasn’t shown such numbers in real-world scenarios.
The important thing to realize is that for the current market, higher speeds come with the expense of decentralization. The projects that have a really high TPS tend to have a high degree of centralization, which is going against the core principle of blockchain technology.
Wavelet is Fast AND Decentralized
Wavelet has been tested to be capable of handling over 31,000 transactions per second! Furthermore, Wavelet is also decentralized (click here to learn more)!
This is the importance of Wavelet’s 31k TPS. Not only is the TPS figure way ahead of the competition, but Wavelet achieves this by sticking with the core principle of blockchain technology!
Here are some articles that might help answer more of your questions: