Why High Transaction Speed Isn't Everything in Blockchain

When evaluating blockchain networks, one metric often gets thrown around: transactions per second (TPS). It’s become a competitive benchmark, with projects boasting ever-higher numbers. But here’s the catch—a high transaction throughput doesn’t automatically make a blockchain superior.

The TPS Comparison: Why the Numbers Can Be Misleading

Let’s start with the basics. Bitcoin processes approximately 5 transactions per second, while Ethereum roughly doubles that. Compare this to traditional payment systems like VISA, which handles 1,500-2,000 transactions per second. On paper, it looks like blockchain is dramatically behind.

But this comparison misses the fundamental challenge: blockchain networks aim to achieve high performance while preserving decentralization. Traditional databases and centralized payment processors have no such constraint. They can optimize purely for speed because a single entity controls the entire system.

The Core Trade-Off: Performance vs. Decentralization

The real bottleneck isn’t engineering—it’s philosophy. Bitcoin boasts thousands of nodes globally running the network, each validating transactions independently. This distributed approach is what makes Bitcoin truly decentralized and censorship-resistant. However, it comes at a performance cost.

A hypothetical blockchain with only 10-20 nodes could easily achieve superior transaction throughput compared to Bitcoin. But at that point, you’ve sacrificed the core value proposition of blockchain technology. You’re left with an inefficient, centralized database.

The Scalability Research Imperative

Developers have long recognized this challenge, making blockchain scalability a major research focus. The goal isn’t simply to maximize TPS—it’s to increase network capacity while maintaining decentralization, security, and other critical blockchain properties. This is why solutions like sidechains and payment channels have gained attention; they attempt to optimize performance without compromising the network’s essential characteristics.

The Real Lesson: Context Matters

When evaluating blockchain projects, skip the TPS arms race. Many networks claiming exceptional transaction speeds have achieved this by centralizing decision-making, reducing node requirements, or cutting corners on security. The question you should ask isn’t “how many transactions can this process?” but rather “what did this network sacrifice to achieve that speed?”

A blockchain’s true value lies in balancing multiple factors—speed, security, and decentralization. High TPS means nothing if you’ve eliminated the features that make blockchain worth using in the first place.