By Natalie Lord
We’re living in an environment where speed is everything, time is of the essence and we expect instantaneous gratification in all we do. It’s of no surprise then that the race for speed is rife in the cryptocurrency sphere.
Transaction speed has become increasingly important with the advent of online retail. It’s most commonly measured in transactions per second (TPS). Currently, when you make a purchase online you will usually be given the option to pay by credit card or by PayPal.
Visa claims it can manage more than 24,000 TPS, based on testing down with IBM in 2010. That level has never been tested in real time, and the number of transactions that Visa actually process every year isn’t disclosed.
PayPal can support hundreds or thousands of TPS and offers instantaneous verification on purchases.
So retailers considering offering payment in Bitcoin may well be reluctant when they consider its performance comparatively. Bitcoin can support between two and three TPS, meaning that customers could be waiting for several hours before their sale is finalised.
It’s cause for concern, particularly in light of recent research which shows that a slow or lengthy check-out page will cause more than 25% of customers to abandon their prospective purchases. Google further impresses the need for speed, indicating that more than 50% of web users will leave a page if it takes more than three seconds to load!
Society is becoming increasingly impatient and those behind cryptocurrencies are only too aware of it. We take a look at which cryptocurrencies are hoping to rival Visa and Paypal in the race for transaction speed.
In terms of market share, Ripple ranks high. It was designed with transaction speed in mind and claims it can handle 1500 TPS, with the potential to scale up to Visa’s levels. Ripple achieves its speeds by working with trustworthy institutions to ensure liquidity and achieve consensus, instead of opting for the proof-of-work algorithm.
Stellar was developed by one of Ripple’s co-creators and has managed to garner the attention of some heavyweight financial institutions, even though it has a far smaller market share than Ripple. It claims to be able to achieve 1000 TPS, but is currently used primarily as an intermediary for a currency exchange service.
T.OS is another cryptocurrency designed for fast transactions. It claims to be able to handle approximately 1000 TPS and achieves this by having two tokens, one for transactions and one for exchanges. Further, it ensures stability for users by pegging the currency’s value to the fiat in their home country.
Many coins are promising significant transaction speeds going forward, but these projections are largely unproven and will require trials and testing before true transaction speeds are ascertainable.
Here’s a list of the coins currently topping the charts on transaction speed:
- Ripple says XRP can handle 1500 TPS.
- Stellar can cope with 1000 TPS.
- NEO can manage1000 TPS
- NEM says it can handle hundreds of TPS.
- Qtum can manage 60-70 TPS.
- Bitcoin Cash can currently handle about 61 TPS.
- Dash can process 48 TPS.
- Litecoin can manage about 26 TPS.
- Ethereum can handle about 15-20 TPS.
- Cardano can process between 5-7 TPS.
In the future, solutions like the Lightning Network will significantly impact transaction speeds for Bitcoin, Litecoin and Vertcoin amongst others. In fact, many of the coins listed above are in the midst of developing solutions that promise to scale transactions exponentially. It appears cryptocurrencies are set to be serious contenders in the race for speed.