My Blockchain Primer

How fast is Blockchain or it's transaction rate?

Transactions per second of various implementations

At the end of the day, it is a fine balance between cyber security, operational resiliency and business objectives (of using blockchain). You can’t have your cake and eat it too.

For information systems, we are often concerned about its transaction rate or how many business transactions can the system handle in a given amount of time. Typically, we term it as the number of transactions per second (TPS).

Based on online findings, bitcoin does 3 TPS, Ethereum supports (on the average) 5 TPS and while Hyperledger Fabric’s current performance goal is 100,000 TPS, it only managed to hit 700 transactions per second according to some users. To put these figures into perspective, VISA network processes an estimated 45,000 transactions per second at its peak.

 

What is ‘Confirmation’ in blockchain?

In blockchain, transactions first go into an unconfirmed transaction pool. This pool contains non-validated transaction that will eventually be picked up to be processed by the miner or endorsing peer into a block (of transactions). The TPS figures above means how fast transactions take to be validated and included into a block.

If it is the top-most block, it would be considered as 1 confirmation. If there is another newly minted block after it, it would be considered as 2 confirmations. The number of confirmation increases as new blocks are minted (after the block containing your transaction).

As I have highlighted in earlier sections, the difficulty of manipulating data in a block increases as more blocks are minted after it. Hence, there can be rules in place to enforce that transactions are considered valid only when there are 6 confirmations (i.e. 5 blocks after the block containing your transaction). This greatly increases the tamper resistance of your transaction.

 

So why does my cryptocurrency transaction takes so long?

For cryptocurrencies, aside from the TPS and confirmation rules (i.e. number of confirmations required), the fees that you pay the miners or endorsing peers for processing your transaction also affects how readily your transaction will be picked up from the unconfirmed transactions pool. Essentially, the more fee you pay, the more miners are incentivized to process your transactions (before others).

 

So how do I speed up my own blockchain network?

The transaction speed depends on the hashing speed of your miners or endorsing peers, namely, a function of memory, CPU or GPU, configuration, etc. As we have learnt that the blockchain network is not solely just transaction speed, confirmation rules also plays a part as it affects the time taken for your transaction to be valid and recognized by the network.

At the end of the day, it is a fine balance between cyber security, operational resiliency and business objectives (of using blockchain). You can’t have your cake and eat it too.

 

Treat shadowandy!

If these step-by-step guides have been very helpful to you and saved you a lot of time, please consider treating shadowandy to a cup of Starbucks.