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
đź“ŹCalculating Cryptocurrency Speedsđź“Ź
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
đź’±The Fastest Cryptocurrency: Transaction Finalityđź’±
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
