The ultimate goal of cryptocurrency and related technologies is to replace inefficient and centralized traditional financial systems. The crypto space has made considerable strides to achieve this goal with the growth in mainstream adoption of several blockchain products. They include yield farming, decentralized lending borrowing, decentralized payments, and more. Slow transactions have been the major bottleneck towards mainstream crypto adoption.
Fast Transactions and Scalability
Most cryptocurrencies suffer from scalability issues making them too slow to support the numerous transactions made by users every second. Compared to traditional payment systems such as PayPal or VISA, which can support more than 65, 000 transaction messages per second, cryptocurrencies transaction speeds are still pretty slow.
However, some cryptocurrencies are more than trying, providing users with fast settlements of their transactions. Here’s a look at the top five cryptocurrencies with the highest transaction speeds.
Cryptocurrency Transaction Speeds in Detail
Transaction speed is one of the key features of any cryptocurrency, as it ultimately determines how fast transactions are confirmed on the network. The higher the transaction speed is, the faster the blockchain can confirm transactions and add them to the block. The faster a cryptocurrency network can process transactions, the more scalable it is.
There are various terms used to describe cryptocurrency transaction speed. Some common terms include:
- Average transaction speed: The average transaction speed is the median transaction confirmation time achieved on a crypto network. The average transaction speed is calculated by taking the mean value of a sample of transactions on the network. Average transaction speed is an accurate representation of a crypto network’s transaction speed.
- Actual transaction speed: The actual transaction speed measures how quickly cryptocurrency transactions are processed on a blockchain. A high actual transaction speed means that transactions are processed much faster, enabling the network to handle congestions more effectively.
- Theoretical transaction speed: Theoretical transaction speed is the maximum possible confirmation time of a cryptocurrency. It’s established by dividing the number of transactions per second by data in one block and multiplying them by two. Theoretical transaction speed is limited by several factors such as block size limit, number of blocks mined per day, transaction size limitations, and the number and size of memory pools.
- Claimed transaction speeds: Claimed actual transaction speed refers to the transaction speed as claimed by its founders or developers. In most cases, the claimed actual transaction speed may not be accurate-can be lower or higher than the actual transaction speed.
- Transaction confirmation time: Transaction confirmation time refers to the time taken for a transaction to be confirmed by the network. The transaction confirmation time determines how quickly you can spend your coins plus the regions you can spend them from.
- Transactions per second (TPS): Transaction per second (TPS) refers to the transaction processing rate per second. TPS is a crucial metric used to assess a crypto currency’s security, scalability, and how it generally performs when put up against its competitors.
Cryptocurrency transaction speed is dependent on various factors such as block size, block time, network traffic, and transaction fees. Cryptocurrency transaction speed can slow down considerably owing to increased network congestion, high transaction fees, and huge transaction volumes.
Top 5 Cryptocurrencies with the Fastest Transaction Speeds
There are a number of cryptocurrencies that aim to make transacting faster. Here are 5 of the fastest crypto projects.
Average Transaction Speed: 1.5s
Termed as Ethereum’s rival, EOS is a blockchain-based decentralized platform that facilitates decentralized applications. Designed to handle the development of large-scale dApps, the cryptocurrency is highly scalable with the capability of processing transactions in a flash and completely free of charge.
EOS offers a higher level of scalability, fast transactions, and advanced dApps services. It can comfortably handle 4000 transactions per second with an average transaction speed of 1.5 seconds. As such, it’s one of the fastest cryptocurrencies available today.
Average Transaction Speed: 4s
Launched in 2012, Ripple (XRP) is an open-source crypto platform that offers cross-border money transfer solutions enabling banks and other financial institutions to transfer funds safely and easily. Ripple was designed to be a more scalable, safe, fast, and less costly digital payment protocol providing an alternative to existing traditional monetary platforms such as SWIFT.
Ripple is one of the fastest cryptocurrencies, capable of handling 1500 transactions per second with a transaction time of 4 seconds.
TPS: 10, 000
Average Transaction Speed: 6s
Launched in 2015 by Vitalik Buterin, Ethereum is an open-source computing platform based on the blockchain. The platform features smart contracts and supports the development of various protocols such as DeFi and NFTs. Ether, the cryptocurrency that powers the Ethereum platform, currently holds the second-most valuable digital currency after bitcoin.
Ethereum blockchain can handle 20 transactions per second at the movement with an average transaction speed of 5 minutes. However, the platform is in the process of making the much-awaited move to ETH 2.0, where it will shift from PoW to PoW consensus mechanism. Once ETH 2.0 is fully operational, it will be among the fastest cryptocurrencies supporting up to 10 000 transactions per second with a confirmation time of 6 seconds.
TPS: 29,000 TPS
Average Transaction Speed: 2.575 s
Solana (SOL) offers a platform for the creation of a decentralized app (DApp). The platform integrates proof-of-history (PoH) with proof-of-stake (PoS), providing unmatched scalability. As such, it offers amazingly short transaction and validation time for both smart contract execution and transaction.
Solana’s hybrid protocol facilitates lightning-fast transaction speeds. The protocol supports 29,000 transactions per second with an average transaction speed of 2.57 seconds. Owing to its extremely fast transactions, the cryptocurrency has attracted a lot of interest from crypto investors.
TPS: 10, 000 TPS
Average Transaction Speed: 15 s
Created by Da HongFei and Erik Zhang in 2014, NEO is an open-source, distributed blockchain-based smart economy system that facilitates the creation and management of digital assets and cryptocurrencies. NEO is commonly referred to as the Chinese Ethereum owing to its similar use cases.
NEO is highly scalable with a capability of processing 10 000 transactions per second with an average transaction speed of 15 seconds. Its high scalability is hugely valued by crypto investors and has great growth potential.
Cryptocurrencies’ slow transaction speed coupled with scalability issues have been a major hindrance towards mainstream adoption, with traditional financial systems such as Visa being way faster and more scalable than most cryptos. However, not all cryptocurrencies suffer from scalability issues, as some can process transactions pretty fast.
As an avid crypto investor, you’ll want to choose cryptos with fast transactions as they confer plenty of benefits, including low transaction fees, high security, and enhanced transaction efficiency, especially when trading cryptos. So, before investing in a particular cryptocurrency, try and find out its transaction speed and scalability capabilities.