Understanding Blockchain Speed

Understanding Blockchain Speed

The first metric in almost any discussion of blockchain projects and, for many, the barometer of success for Layer-1 protocols is the TPS or “Transactions per second”.

We’ll give an overview of what TPS is, how to calculate it, and highlight the reasons why it’s a problematic and frequently inaccurate measure of blockchain speed. As we lay out terms, we will explain why Tetrix is the fastest public blockchain in crypto.

What is TPS?

In its broader usage, the term measures how many transactions occur in one second in a given information system. For reference, on a typical day, the Visa Network processes approximately 1400 TPS.

For blockchain protocols, TPS is calculated by dividing the average number of transactions per block by the block time in seconds. Boring right? Bear me with me on this.

TPS = No. txn. per block ÷ average txn. size in bytes

Examining the above, one might ask about what counts as a transaction. Different projects have rationales for defining what qualifies as a transaction, and the answer may vary by protocol. Some projects even count internal messages in their systems as transactions.

One might also note that TPS deals with averages. In real-life, some transactions, like simple balance transfers, take far less time to process than EVM-based smart contract transactions, which take measurably longer.

The overall lack of standardization already indicates the problems with the expression as a gauge of speed.

Why TPS is a faulty metric?

If a blockchain is capable of 7 TPS, like Bitcoin, does this mean that our transaction will be quickly executed and confirmed at a moment of extremely low network traffic? Experience demonstrates otherwise.

TPS does not account for the total duration in which transactions are processed and then finalized in a decentralized network. When a transaction is submitted to the network, validators arrive at a consensus that a transaction is legitimate. But the transaction cannot be fully confirmed until there is a guarantee that the transaction is immutable and final.

Most blockchain systems offer probabilistic transaction finality — transactions are not immediately final but become so eventually after a certain number of additional blocks have been appended to the chain.

The idea is that as a block continues to be approved and added, the probability increases that prior transactions are valid and irreversible. On Bitcoin, finality generally requires 6 confirmations, with 20–25 confirmations or additional blocks required on Ethereum.

Though TPS is a measure of speed, it is not correlated to finality. A project may boast impressive TPS based on a reasonable definition of transactions, but finality may take longer to be established.

TTF not TPS

Time-to-finality (TTF) is an alternative and more accurate gauge of speed since it measures the time from transaction submission to confirmation with the guarantee of irreversibility. TTF is a direct analog to latency in networking. Latency is usually measured as a round trip transmission — the time taken for information to get to its destination and back again.

Clearly, no user wants to wait more than a few seconds — as with Visa — for a transaction to be confirmed. Knowing TTF tells us exactly how long one can expect to wait, whereas TPS only tells us how long it takes for a transaction or process before being finalized.

What we do at Tetrix is that as soon as a block is written to the chain, it is final and irreversible.