Transactions Per Second

What Are Transactions Per Second (TPS)?

Transactions per second (TPS) describes the maximum number of transactions that a computer system can execute in a given span of time. For example,  VISA can process up to 1,700 transactions per second. 

Considering the TPS of blockchain networks, the maximum transaction per second in the crypto industry is 50,000. (by Solana network). This metric can be used to assess blockchains' ability to execute real-world transactions.

Factors of Complications in Calculating TPS

Block Time: The block time determines how soon transactions are confirmed by the blockchain. The apparent average block time for bitcoin is 10 minutes, implying that the network processes around seven transactions every second.

Size of Transaction: The data transmitted with every transaction varies greatly amongst blockchains. A single Bitcoin transaction could be as little as 226 bytes or as much as 500 bytes in length. Higher transaction sizes result in longer blockchain processing times.

Block Sizes: In the blockchain, it is the volume of transaction data that a block can hold. The more individuals need to run a full node, the larger the block. It is simple to compute TPS if you have knowledge about the above factors.

Transaction Per Second (TPS) can be calculated through this formula: (Block size/Transaction size) divided by Block time = Transactions Per Second. 

It's crucial to note that just because a blockchain has a high TPS doesn't mean it's better than other blockchains with lesser TPS. Several blockchain initiatives brag about having a high TPS. However, it is almost clear that such performance was obtained at the expense of other critical components of the network. 

For example, at any given time, Bitcoin has thousands of nodes running the Bitcoin software all around the world. A blockchain with just 10-20 nodes may easily surpass Bitcoin, but it is barely decentralized or distributed.