What Does Transactions Per Second (TPS) Mean?

Last Modified:
October 10, 2024

Quick Summary

  • A blockchain's TPS is the average number of transactions it can complete in one second.
  • Older blockchains like Bitcoin tend to have low TPS. Newer blockchains reach a TPS of 1,000 or more and are very fast.
  • Different factors determine a blockchain's TPS, such as the size of each block of data and the technology it uses to perform transactions.

Measuring a blockchain's TPS, or the number of transactions it can perform in one second, is a way to compare the speed of different blockchain networks. Every transaction—such as sending crypto, buying NFTs, executing smart contracts, updating information, or using dApps—needs to be processed, verified, and recorded before it is considered final. Some blockchains can handle all these tasks efficiently, while others take a long time to complete each transaction.

Newer blockchains such as Solana, BNB Chain, and NEAR usually have a very high TPS and can process thousands of transactions per second. Meanwhile, Bitcoin, the first blockchain ever developed, can process only approximately 7 transactions per second.

A blockchain’s average TPS depends on its:

  • Consensus mechanism (such as Proof-of-Work, Proof-of-Stake, Proof-of-Authority, etc.)
  • Block size, or the number of transactions that make up each “block” of data on the chain
  • Block time, or how fast it takes to create and add each block
  • Software efficiency

If a blockchain’s TPS is very low, users must wait much longer for their transactions to be completed. When this happens, the network becomes congested, and anyone who wants their transactions prioritized must pay higher gas fees.

So, when people talk about TPS, they’re simply discussing how quick and efficient the blockchain is. Knowing the TPS of the different blockchains can help you decide which one to use for fund transfers, decentralized applications, Web3 gaming, and other purposes.

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