It’s no secret that bitcoin’s transaction speeds are slow. It has struggled for some time to scale efficiently and adapt to the demands of its users. Now, it also offers an off-blockchain, second-layer solution as a quick way to make micro-transactions.
However, this scalability problem is not unique to bitcoin. This affects all cryptocurrencies, and has led to the creation of many different cryptoassets, all claiming to solve the problem.
But how do you measure the transaction speed of a cryptocurrency? And what is the fastest cryptocurrency?
How do you measure the transaction speed of cryptocurrency?
The transaction speed of a cryptocurrency is simply its ability to process and store data. Once we have a sense of this, we can calculate its speed using only a few data points. All you need to know is how big each block is, how big the average transaction is, and how often a new block is added to its blockchain.
So, if blocks of bitcoin are 1MB (one million bytes) and the average bitcoin transaction is about 400 bytes, that means each bitcoin block can fit in about 2,600 transactions. Finally, because a new bitcoin block is added to the blockchain every 10 minutes, bitcoin ends up with an average transaction per second (TPS) throughput of about five.
Transaction verification time and finality of transaction
Although increasing the number of transactions per second can improve a blockchain’s scalability, another important factor that affects how the end-user perceives transaction speed is transaction verification time (also known as transaction finality). known in).
As its name implies, it is the time it takes to verify a blockchain transaction, thus making it final. You can calculate this by multiplying the number of block verifications required by the blockchain to consider the last transaction by the time a new block is added to said blockchain.
Therefore, if a transaction needs to be verified three to six times for a bitcoin to be considered final, and a new block is added every 10 minutes, this means that bitcoin’s transaction finality is between 30 and 60 minutes. Is.
What is the fastest blockchain? What is the fastest cryptocurrency?
So, we have already established that bitcoin is not the fastest cryptocurrency. Which begs the question: what is the fastest cryptocurrency, and how many transactions per second can it handle?
Now, there are thousands of cryptocurrencies out there, so we’re going to focus mainly on the ones that are the most well-known, but we’ll also include the fastest options. Better still, you can read it from the handy table below!
Note that while Ethereum currently processes around 30 transactions per second, future updates are expected to drastically increase this figure. The Ethereum 2.0 merge, completed in September 2022, will eventually see the introduction of blockchain sharding, which could allow for hundreds of thousands of transactions per second.
Solana Is The Fastest Cryptocurrency—But It’s Not Clear
On the face of things, Solana is the fastest cryptocurrency. Some believe that Solana can increase the number of transactions per second even further, which could vastly increase the scaling capability of the network. However, at the time of writing, the crypto world is reeling from the FTX and Alameda Research bankruptcy and its aftermath.
Unfortunately, Solana was a crypto, a great deal off both exchanges. Alameda Research alone had over $1.2 billion in SOL. When FTX and Alameda went down, the price of SOL dropped from over $30 to around $13 per SOL. Furthermore, the massive price drop saw a large number of SOL stackers unstake coins, further exacerbating the problem.
Solana is far from dead. It’s hard for investors to see a drastic drop in price and removing validators could temporarily damage network stability, but Solana still has a lot going for it that will aid its recovery. At least, when the crypto market recovers, Solana has a great chance to recover as well.
Is the fastest cryptocurrency always the best?
As you can see, two important factors affect the speed of a cryptocurrency: the number of transactions per second it can execute and its transaction verification finality. This means that a cryptocurrency is fast only if it has both a high TPS and a low verification finality.
But is the fastest cryptocurrency always the best option? Certainly, if all you need is fast transaction speed, then yes, it is the right choice. But take the case of Solana. Although it is the fastest crypto, if you want to use Solana as a functional crypto to buy products or services, you are very limited. That crown still goes to bitcoin. Furthermore, while Solana has a healthy range of dApps covering gaming, finance, etc., it is still not as large as Ethereum.