Blockchain Scalability: The Misleading Metric of Transactions Per Second
The concept of Transactions Per Second (TPS) is often used to measure a blockchain network's scalability, but it can be misleading. The TPS figure cited by many projects is typically a theoretical maximum under ideal conditions, and not always achievable in practice.
To calculate TPS, two architectural parameters are considered: block size and block time. Block size sets the maximum data that can be included in a single block, while block time determines how frequently new blocks are produced and added to the chain. Dividing the maximum number of transactions by block time yields the theoretical TPS.
BTC's 7 TPS figure is an example of this calculation: its 1 MB block limit can hold approximately 4,000 transactions, while a 10-minute block time means that only around 6.7 transactions per second are actually processed on-chain.