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Blockchain technology continues to progress at an incredible speed. This great technology behind cryptocurrencies continues to move at the same pace.
But we must regret that Bitcoin's blocks, which dominate 60% of the market dominance, are still very slow. These blocks are about 1mb in size and the processing speeds are slow and can now approve a maximum of 7 blocks per second. I mentioned in my previous article that the technology of Bitcoin is very old and the electricity it consumes leads to waste. Although Bitcoin is still the most valuable cryptocurrency, it reminds me of Adam Smith's value paradox, but that's not the subject of our article.
Things are not so different in Ethereum, the second most important cryptocurrency after Bitcoin.
Sadly, Ethereum has a similar problem — as its co-founder Vitalik Buterin himself admitted. The network has a maximum capacity of 15 transactions per second, and he warned that if the status quo remains, the industry’s infrastructure will be unable to cope.
In summary, what I'm trying to say is that the transfer of crypt currencies such as Bitcoin and Ethereum should be possible without delay. Because as far as we know, a Bitcoin transfer takes approximately 1 hour, while an Ethereum transfer can take up to 6 minutes.
What if these delay issues cannot be solved? As is known, fiat money can be transferred quickly. If cryptocurrencies want to replace fiat currencies, it should first solve this problem. Because investors will not invest more in slow transfers and will leave cryptocurrencies.
I would like to emphasize that Bitcoin is the fire of revolution. If it wasn't for him, we would never have reached the point where we came today. I even recommend that you always keep Bitcoin in your portfolio. But if you want to use cryptocurrencies quickly in your daily life, don't choose Bitcoin for it.
Before switching to cryptocurrencies, let's take a look at the fastest tool that allows the transfer of fiat money.
The first name we see is Visa. Although Pisa says that the Transaction Per Second is 24,000, this figure does not reflect the facts. Visa's TPS rate is around 1.700.
Note: Transaction per second (TPS) is the number of transactions executed per second. In other words, it can be calculated based on how many transactions are executed over a certain duration of the test and then calculate it for a second.
Now let's take a look at the technologies of cryptocurrencies after Bitcoin and Etherum.
*1MB block size
*Token limit of 21 million
*Slow processing speeds
*High energy usage
*High transaction fees
*No-counterparty assets (value determined by market dynamics)
*Decentralised platform
Ethereum (ETH) scales poorly even despite a large amount of miners: Currently, its blockchain accommodates around 20 TPS. However, the situation is likely to change once ETH moves from the proof-of-work (PoW) to the proof-of-stake (PoS) algorithm.
*Token limit of 18 million per year
*Is a decentralised blockchain platform
*Specialises in ‘’smart contracts’’ that facilitate the exchange of value
*Coded programmes run without third-party interference
*Users must use tokens to perform actions on the blockchain, this forces them to mainly stick to financial actions
*In 2016, after a cyberattack that totalled $150 million, it was split into Ethereum (ETH) and Ethereum Classic (ETC)
According to Ripple, XRP, the digital asset used in the company’s cross-border payment system, “consistently handles 1,500 transactions per second.” Moreover, it allegedly takes just around four seconds for payments to settle, while XRP can scale up to 50,000 TPS “to handle the same throughput as Visa.”
However, unlike most other currencies mentioned in this article, Ripple doesn’t have a blockchain. For that purpose, the company has its own patented technology: the Ripple protocol consensus algorithm. Consequently, XRP has been disregarded as a cryptocurrency by part of the community.
*Token limit of 100 billion,with XRP owning 60 million tokens
*Decentralised exchange on the XRP Ledger
*Can create customisable tokens
*High processing capacity
*Extremely fast transaction settlement speed of four seconds
*Uses less energy than Bitcoin, Ether or Visa
Claimed TPS capacity: 4.000 (estimated: 50)
In July 2018, EOS’s chief technology officer, Daniel Larimer, tweeted that its cryptocurrency was performing at 2,351 TPS. A few months later, blockchain testing company Whiteblock publishedresults of “the first independent benchmark testing of the EOS software.” The report showed that with “real world conditions” of round-trip latency and 0.01 percent packet loss, EOS performance was actually below 50 TPS.
*Smart contract platform
*User accounts are separated from their private keys
*This provides delegated proof of stake
*Includes on chain governance
*Parallel processing allows users to freeze or modify their applications according to programmable rules
*Decentralised operating system
*Maximum of 5% annual inflation
*Tokens have automatic emission
*System is upgradable
*Asynchronous communication with other blockchains even if EOS is faster
*Fast processing speeds
FLETA has been designed from the very beginning to be extremely fast and have high security. There are two particular innovations which help FLETA achieve their incredible throughput: FLETA is determined to be the ideal platform for DApp development. To that end, they have incorporated several exciting innovations and design choices to make sure that their platform is as scalable as possible. The very fact that they can do 15,000 tps and are looking to achieve 20,000 tps realistically should be tantalizing enough for the developersto choose FLETA as their platform of choice.
*Has own patented consensus algorithm: Proof of Formula
*The processing speed became 1.8 times faster.
*Data size got optimally reduced, making the structure more efficient.
*They reduced the block size by 43%.
*The reduced the size of the index, which is required for operations.
*LEVEL Tree Validation.
*Block Redesign.
SUMMARIZE
The following table shows the TPS data for the major projects I mentioned above and the TPS data for other cryptocurrencies.
Scalability is one of the biggest obstacles to blockchain technology. But today, 10 years after the invention of Bitcoin, I can say that we have made rapid progress.
Many other, newer cryptocurrencies have since attempted to create their own blockchains, which are allegedly faster and cheaper. Their primary goal was often to beat the ultimate crypto nemesis, the centralized global payment system Visa, which can process 1,500 TPS, according to the IBM study conducted back in 2010. Many blockchains have since surpassed that point during their scalability race already.
Although cryptocurrencies have long since passed major firms that provide fiat currencies transfer transactions, they still believe there is a long way to go.
Legal Disclaimer:This paper is for general guidance only and it does not constitute legal investment advice.Disclosures:Im not a part of any cryptocurrency or Fleta. I have not been paid orotherwise hired by Fleta too. All risks are your responsibility when
investing.
SOURCES
1. https://cointelegraph.com/explained/blockchains-scaling-problem-explained
2. https://theperformanceengineer.com/2013/09/11/loadrunner-how-to-calculate-transaction-per-second-tps/
3. https://www.getsmarter.com/blog/market-trends/eight-types-of-cryptocurrencies-compared/
4. https://cointelegraph.com/news/who-scales-it-best-inside-blockchains-ongoing-transactions-per-second-race
5. https://www.investinblockchain.com/transactions-per-second-and-consensus-mechanisms-of-the-top-50-cryptocurrencies/
6. https://news.bitcoin.com/no-visa-doesnt-handle-24000-tps-and-neither-does-your-pet-blockchain/
7. https://medium.com/fleta-first-chain/what-makes-fleta-so-fast-783fbdb7b18
