Understanding Transactions Per Second (TPS) in Blockchain: A Key Metric for Scalability

London, 15 January 2026 – Transactions per second (TPS) measures the number of transactions a blockchain network can process in one second, serving as a crucial indicator of its speed, efficiency and scalability. As blockchain technology evolves, TPS has become a focal point for developers, investors and users seeking to assess network performance and potential for real-world applications.

What is Transactions Per Second (TPS)?

Transactions per second (TPS) refers to the rate at which a blockchain network can validate and record transactions. It is a fundamental metric for evaluating a blockchain’s throughput and capacity to handle demand. Higher TPS indicates faster processing, which is essential for applications requiring quick confirmations, such as payments, gaming and decentralised finance (DeFi). However, TPS is influenced by various factors, including consensus mechanisms, block size and network architecture.

In the context of cryptocurrency, TPS differs from traditional financial systems. For instance, Visa processes around 24,000 TPS, while Bitcoin’s TPS is approximately 7. This disparity highlights the scalability challenges blockchains face, prompting innovations like layer-2 solutions to boost performance.

Factors Influencing TPS

Several elements determine a blockchain’s TPS, each balancing speed with security and decentralisation. Consensus mechanisms play a key role: proof-of-work (PoW) networks like Bitcoin prioritise security but achieve lower TPS due to computational intensity, whereas proof-of-stake (PoS) or delegated proof-of-stake (DPoS) networks offer higher TPS by streamlining validation.

Block size and block time are also critical. Larger blocks can accommodate more transactions, increasing TPS, but may raise latency. Shorter block times enable faster confirmations but can compromise security if not managed properly. Scalability solutions, such as sharding or layer-2 protocols like the Lightning Network, aim to enhance TPS by offloading transactions or parallelising processes.

Network architecture and transaction complexity further impact TPS. Simple transfers process faster than complex smart contract executions, and factors like latency or congestion can reduce real-world TPS compared to theoretical maximums.

Key Facts / Stats

Frequently Asked Questions

Is higher TPS always better?

Not necessarily. While high TPS improves scalability and user experience, it must balance with security and decentralisation. Networks prioritising speed may compromise robustness, as seen in the blockchain trilemma.

Can Bitcoin or Ethereum increase their TPS?

Yes. Bitcoin’s Lightning Network and Ethereum’s layer-2 rollups and sharding upgrades significantly enhance TPS by processing transactions off-chain or in parallel, reducing congestion and fees.

What’s the difference between theoretical and real-world TPS?

Theoretical TPS represents maximum capacity under ideal conditions, while real-world TPS accounts for factors like network congestion, transaction complexity and latency, often resulting in lower actual performance.