FASTEST Cryptocurrencies!! Blockchain Speed 101!
⛓The Blockchain Trilemma⛓
The blockchain trilemma was conceptualized by Ethereum founder Vitalik Buterin in 2016, and it states that a cryptocurrency can only be two of the following three things: Scalable, Decentralized, and/or Secure
🤔What Is Speed In Cryptocurrency?🤔
Transferring a coin or token from one wallet to another is not the same as executing a complex smart contract in a decentralized application like an Aave flash loan Cryptocurrency transactions are more like packets of data than blips in a digital system. Cryptocurrency blockchains are basically like databases that process and store transaction data For example, each block on the Bitcoin blockchain can hold 1mb of data, which is 1 million bytes. The size of the average Bitcoin transaction is just under 400 bytes. With a 10-minute block time, that’s 5 TPS
📏Calculating Cryptocurrency Speeds📏
Understanding that a cryptocurrency’s speed is just its ability to process and store data, it becomes possible to calculate the real transaction speed of any cryptocurrency using a few metrics All you need to know is how big each block is, how frequently a block is made, and how large the average transactions on that cryptocurrency’s blockchain tends to be
⏩The Fastest Cryptocurrency: Transactions Per Second⏩
While Visa’s self-reported transactions per second is 65 thousand, Visa only processes around 2000 transactions per second on any given day The only existing cryptocurrency that comes close to this level of throughput is currently Solana, which can handle between 50 to 65 thousand transactions per second, even for smart contract transactions
💱The Fastest Cryptocurrency: Transaction Finality💱
If you think the crypto speed case is closed with Solana, I’m afraid you’re mistaken. That’s because transaction execution and transaction confirmation are two very different things Cryptocurrency exchanges always want to make sure the transaction is final before they credit your account, and the likelihood that a transaction is final typically increases with each confirmation It is fair to assume that crypto merchants will want similar confirmations in the future. Solana has a high TPS, it does not provide instant finality like Algorand, Cosmos, and other Tendermint based cryptos
🤷♂When Speed Doesn’t Matter🤷♂
Whether a cryptocurrency is packing a 10k TPS engine or a 65k TPS engine under the hood is kind of irrelevant You’ve probably noticed that when you make a payment using a debit or credit card it normally takes between 5 and 10 seconds to complete, even when it’s an online payment Many cryptocurrencies have block times that fall within this range, which would put their transaction speeds on par with traditional payment systems for the average user, finality notwithstanding
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📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome
