What is Throughput in Blockchain

Blockchain throughput is defined as the rate at which a blockchain completes transactions. Transaction throughput is usually measured in transactions per second (TPS) but may also be given in TPMm (transaction per minute) and TPH (transactions per hour). This should differ from a blockchain's speed but may sometimes be used to gauge how fast a blockchain operates.

The throughput of a blockchain depends on several factors, such as the mining protocol, block size, network traffic, and the transaction’s complexity. Blockchain throughput definition accounts for the impact of network congestion and technical issues.

A high throughput meaning is relative to the capacity of a blockchain; blockchains typically have lower throughput than traditional payment systems, but comparing the throughput of blockchains like Bitcoin, Ethereum, and Cardano shows a marked difference.

Blockchains operating the proof-of-stake (PoS) algorithm generally have higher throughput than blockchains using the proof-of-work (PoW) algorithm. The volume of transactions at any time on a blockchain also impacts the throughput. Slower blockchains like Bitcoin may sometimes have higher throughputs than Ethereum when the latter has high traffic volumes.

Bitcoin may also have higher throughput because it facilitates cryptocurrency transactions. In contrast, blockchains like Cardano and Ethereum have other digital assets such as NFTs, DeFi protocols, and smart contracts.

There are several strategies to increase throughput -sidechains, larger blocks, and new mining mechanisms are commonly used. Engineers constantly work to improve the throughput of blockchains to make transactions easier and faster.

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