Most of us would have heard people saying ‘Blockchain is the future.’ What makes this statement more interesting is that blockchain is already here and is revolutionizing almost every industry. It is already shifting paradigms in the fields of government, agriculture, environment, healthcare, education, and much more.
In simple terms, blockchain is a novel method for storing data. In technical terms, it is a distributed, decentralized, shared digital ledger which stores data in the form of blocks, and the data in each block is secured by cryptography. Data once stored on a blockchain cannot be modified or removed.
So, What Is Transaction Speed, And Why Is It Significant For Blockchains?
Need For Blockchains
Blockchains and cryptocurrencies came into existence due to the inadequacies we face in the current financial system. An increasing number of consumers grew sick and tired of the long wait times associated with validating transactions and payments. Above all, the transaction fee was extremely high. It was at such a time that the concept of blockchain came in a decade ago.
Blockchains can validate transactions 24 hours a day, seven days a week. It allows for transactions to be processed within seconds or at the most, in a few hours. It also reduces the waiting time for cross-border transactions. It eliminates intermediaries and financial middlemen. This, in turn, transaction costs reduced considerably. A blockchain is safe from cybercriminals as the transactional information is not stored in a central hub.
Transaction Speed – Meaning And Importance In Blockchains
Transaction speed refers to the rate at which transfer of data happens from one account to the other. The transaction speed is considered high if a transaction is confirmed quickly, within a limited time period. The viability of a blockchain is gauged based on the transaction speed. The transaction speed of a blockchain depends upon various factors such as block time, block size, transaction fees, and network traffic.
The transaction speed of a blockchain can be enhanced if the block size is increased and the block time is reduced. Block size refers to the fixed size of each block on a blockchain and this parameter cannot be changed. Block time refers to the time interval taken by the network to add a new block to the blockchain.
Having learned the basics of transaction speed, let us now delve deeper into the top five blockchains of 2019 which boast of high transaction speeds.
Being touted as one of the newest blockchains to enter the cryptocurrency market, EOS’s aim is to build a network to process millions of transactions in one second. EOS is also termed as the ‘Ethereum Killer.’ The primary goal of EOS is to build a decentralized blockchain to process fast and free transactions. It allows for smart contracts to be built on top of it. EOS is a blockchain-based decentralized operating system which helps create, host, and support decentralized applications. Launched in June 2018, it is highly popular owing to its transaction speed. During the initial stages of its launch, it crossed 3,000 transactions per second (TPS) and thus broke two records:
- Became the fastest blockchain.
- Became the first cryptocurrency to surpass the transaction speed of Visa (1,700 transactions per second on an average).
Currently, EOS claims to be able to process 50,000 TPS.
It is a distributed social media mainnet which is based on Double Delegated Proof of Stake (DDPOS) which is a new consensus algorithm which solves the issue of the delegated proof of stake method. It is a blockchain-based mainnet which is specifically designed for high-traffic DApps. Futurepia has a Dapp store and provides APIs for DApp developers.
The DDPOS algorithm reduces the risk of collusion between master nodes and improves processing speed. The transaction speed of Futurepia is certified by the Korea Laboratory Accreditation Scheme (KOLAS) and its number of transactions per second has been verified to be 300,000. This is possible due to the DDPOS method developed by Sigma Chain, which helps increase transaction speed and security.
Released in 2012, Ripple is a technology which acts as a digital payment network and a cryptocurrency for digital transactions. It was founded by Chris Larsen and Jed Mc Caleb. Ripple is a digital payment protocol which operates on an open-source, decentralized, peer-to-peer network which allows for seamless transfer of money. Transactions are settled within seconds on the Ripple platform. Ripple is known as one of the fastest and secure blockchains. It can handle an average of 1,700 TPS.
NEO is an open-source community-driven project. It uses digital identities and blockchain technology to digitize assets and automate the management of digital assets with the help of smart contracts. It aims to create a smart economy using a distributed network. It was founded in 2014 and was then rebranded in 2017 along with its vision of a smart economy. Similar to Futurepia and EOS, NEO offers a platform for DApps and provides APIs for developers. NEO claims to have a TPS speed of 1000-10,000. By 2020, it aims to achieve 100,000 TPS, which has already been achieved by Futurepia.
5. Bitcoin Cash
Bitcoin Cash is a cryptocurrency which is a fork of Bitcoin. It is a permissionless, decentralized, peer-to-peer electronic cash system. Bitcoin cash enables to send money to anyone, anywhere in the world, 24*7. It enables new economies with large business transactions, low fee micro-transactions, and permissionless spending. Bitcoin cash can currently handle 65+ transactions per second on an average. It is one among the top ten cryptocurrencies based on market capitalization.
Blockchain is, undoubtedly, one such technology which is shaping the internet and the world at large through its enormous potential. It helps businesses and individuals solve complex problems both now and in the near future.