As the name suggests, transactions per second (TPS) is a type of unit that we use to measure the number of transactions made by a computer system within one second. TPS is a significant measure of capability for blockchain-based projects.
Understanding the term
The evaluation of a blockchain relies on TPS in several ways because it refers to how many real-world transactions it can process. For example, Bitcoin can process 4.6 transactions in one second, whereas Visa, the world’s major financial services conglomerate, has a TPS of 1,700. According to this, Bitcoin is far more convenient and innovative than the traditional financial solutions offered by Visa. On the other hand, the TPS of Ethereum is around 17.8.
The measure of transactions using TPS makes sense not only for blockchain-based projects but is also valid for any kind of computer system that has the capacity to perform complex calculations. Factors that impact transactions per second in the case of a blockchain are: block size, transaction size, and block time. But one should keep in mind that having high TPS does not mean it is high-performance because it could also indicate compromising with other vital aspects.
Transactions per second, or TPS, refer to a computer’s processing power. The scalability issues of Bitcoin have bottlenecked its potential for global-scale adoption, while the Ethereum community is awaiting ETH 2.0, a major update that would boost its TPS.