What is transactions per second (TPS)? Measuring blockchain speed

What is transactions per second (TPS)?

Transactions per second (TPS) is the number of transactions a blockchain network can process in one second. It is a key metric for measuring a blockchain's speed and efficiency. Higher TPS means faster transaction processing, while lower TPS can lead to network congestion and higher fees.

How TPS works

  • Block time: The time it takes to create a new block affects TPS. Shorter block times usually mean higher TPS.
  • Block size: Larger blocks can store more transactions, increasing TPS.
  • Consensus mechanism: Proof of Work (PoW) networks like Bitcoin have lower TPS, while Proof of Stake (PoS) or Layer 2 solutions improve speed.

TPS of popular blockchains

  • Bitcoin (BTC): ~7 TPS
  • Ethereum (ETH, pre-Merge): ~15 TPS
  • Ethereum (with Layer 2 solutions): ~1,000+ TPS
  • Solana (SOL): ~65,000 TPS (theoretical)
  • Visa (for comparison): ~24,000 TPS

Why TPS matters

  • Scalability: A high TPS allows a blockchain to handle more users and transactions efficiently.
  • Lower fees: Networks with high TPS usually have lower transaction costs due to reduced congestion.
  • Real-world adoption: Faster blockchains are better suited for payments, gaming, and DeFi applications.

Challenges of increasing TPS

  • Decentralization trade-offs: Increasing TPS often requires compromises in security or decentralization.
  • Network congestion: If a blockchain exceeds its TPS limit, transactions get delayed and fees rise.
  • Scalability solutions needed: Many blockchains rely on Layer 2 scaling (e.g., Lightning Network, Optimistic Rollups) to boost TPS.

FAQs

Is higher TPS always better?

Not necessarily. A blockchain also needs strong security and decentralization, not just high speed.

Can Bitcoin or Ethereum increase their TPS?

Yes. Bitcoin's Lightning Network and Ethereum's Layer 2 rollups significantly boost TPS.

What's the difference between theoretical and real-world TPS?

Theoretical TPS is the maximum possible speed, while real-world TPS considers factors like network conditions and congestion.

Other Glossary Terms

DeFi

DeFi, or decentralized finance, refers to blockchain-based apps that offer financial services without banks. It runs on smart contracts, giving users full control over their assets.

Blockchain trilemma

The blockchain trilemma is the challenge of achieving scalability, security, and decentralization at the same time. Learn why it matters — and how projects try to balance the trade-offs.

Crypto Address

A crypto address is a unique identifier used for sending and receiving cryptocurrency on blockchain networks. Linked to a wallet

Public Blockchain

A public blockchain is an open, decentralized network where anyone can participate, validate transactions, and view the ledger. Learn how it works, its benefits, and the challenges it faces in scalability and security.

Circulating Supply

Circulating supply is the number of crypto tokens actively available in the market. It impacts price, market cap, and scarcity, making it a key metric for investors. Bitcoin has ~19.5M BTC circulating, while Ethereum's supply fluctuates.

Block in a blockchain

A block in a blockchain is a digital record that contains a batch of verified transactions, along with metadata such as a timestamp, cryptographic hash, and a reference to the previous block.