The world of cryptocurrencies is dynamic and unpredictable. Since there is a lot of development happening in this domain, we see changes almost on a daily basis. This is why the topic of the number of transactions per second (TPS) is a hot one.
It is a highly competitive market, especially since no cryptocurrency has made its way to being used as a global payment system yet. Since the battle is currently in session, there are a number of candidates for the highest TPS and therefore, the win.
What industries need fast transactions?
Transaction speed is more important in certain fields than in others. For instance, online gambling is a huge industry that requires the fastest possible transactions. Imagine being in an online casino and having to wait for your winnings to be processed for days or even a week, it does not sound like fun, does it?
That’s why the best Bitcoin casino options are thriving, as players enjoy near-instant payouts of their winnings, as well as the other benefits of using crypto.
Trading and investing are also domains that require instant transactions. More than 30% of investors would consider investing more having been promised to be able to withdraw their funds instantly and almost half of them would change operators for such a feature.
Why is transaction speed important?
Centralized payment systems generally have more TPS than decentralized ones. This is one of the main reasons why crypto payments have not gone global yet. TPS is the main obstacle on that road and it makes sense, come to think about it. Nobody wants to wait in a huge line at a store where each payment takes even a few minutes more than usual.
Now multiply those few minutes with the average number of people in line at any random store. That line would multiply instantly and the whole world would be seriously shaken by this change. This is why companies are putting their primary focus on speeding up the transaction process as much as possible.
What are the top candidates for 2024?
Bitcoin
Bitcoin is the most popular and oldest cryptocurrency. However, when it comes to the speed of transactions, it is way behind many other currencies.
Given that it only supports up to 7 TPS, compared to Visa with 24,000 TPS or MasterCard with 5,000 TPS, it is safe to say they are extremely far away from the goal if the goal is faster transactions. Sadly, this makes Bitcoin absolutely irrelevant in this race.
Ethereum
When it comes to market capitalization, Ethereum is the second largest, after Bitcoin, naturally. However, it is doing much better than Bitcoin on the topic of transaction speed.
Ethereum 1.0 supports 15 TPS. Regardless of the fact that this was quite a challenge for developers, they ended up creating Ethereum 2.0, a new and improved version with better security, lower energy consumption and, best of all, a surreal transaction speed of up to 100,000 TPS.
Solana
Solana was launched to solve scalability issues other cryptocurrencies have. Thanks to a combination of Proof of History (PoH) and Proof of Stake (PoS), Solana managed to reduce the time to finish transactions and also validate them faster thanks to actual people called validators who add transactions to the blockchain. They can be trusted as doing good work will earn you rewards so it is a system that works quite well.
Ripple
Ripple has become popular due to its affordable and fast cross-border transactions. Ripple’s team ambitions included taking over the globe by creating a more efficient payment system. Its transaction speed beats Bitcoin and Ethereum making Ripple a serious rival for the number one spot when it comes to efficiency in crypto payments.
Moreover, the fees are not related to the value of transactions which makes it very convenient for large and cross-border transactions.
EOS
This cryptocurrency is known for its transaction speed which can hit a maximum of 4,000 TPS. This is all thanks to the famous DPoS consensus algorithm EOS uses. Essentially, it uses a combination of centralization and decentralization making the members of the EOS community an important part of the whole process.
They are the ones who validate each transaction and add it to the blockchain. Since they do receive rewards, they are highly motivated and the whole process is more efficient due to their diligence.
NEO
At first glance, it may seem that NEO has nothing new to offer to the competition as its transaction speed is only 15 TPS. However, there are other factors that make this crypto worthy of mentioning such as its security.
The algorithm that their system uses is highly secure so its users can rest assured they would be safe from all sorts of malware attacks.
Cardano
Cardano was launched by a co-founder of Ethereum whose idea was to create a faster and more secure crypto.
Indeed, Cardano can handle up to 1,000 TPS which makes it highly competitive. These results are achieved through the use of a special algorithm whose main features are enabling higher transaction speed and throughput.
Why use cryptocurrency if TPS is still low?
Cryptocurrency offers a lot of advantages over decentralized systems. They ensure your money is safe with cryptographic techniques and other strategies that protect your payment method from malicious attacks.
Moreover, the fees related to payments are significantly lower compared to traditional payment methods. They are also extremely accessible as one only needs an internet connection.
Basically, whichever transaction enters the blockchain, it is there forever and it cannot be altered or deleted. This is the beauty of the whole system. Everything is transparent and there are no intermediate organizations such as banks in the traditional payment system.
Conclusion
Crypto transactions have made immense progress in recent years and they are definitely becoming serious competition to traditional payment systems. For reference, according to statistics, Visa supports around 24,000 TPS, and MasterCard only 5,000.
This puts things into perspective. Despite the fact that traditional payment systems still win at transaction speed, the security and independence that decentralized payment systems offer are becoming more and more attractive to the public.
