John Doe 12/06/2020 10:30 114
Visa card processing system handles about 1,700 transactions
per second. The Bitcoin blockchain can handle about 4.6 transactions
per second. Other blockchains, such as the Ethereum, may be
faster but they still cannot approach Visa’s speed.
Three components of blockchain play off against each other when you try to increase the speed of blockchains. These elements are decentralization (how many computers maintain records), scalability (how fast each transaction can be processed), and security (how long it takes to verify a transaction). Usually, to attempt to speed up a blockchain by changing how one of these elements works will adversely affect one or both of the others.
A block in a blockchain contains a number of transactions. Each transaction records the buyer, the seller, the amount, etc. The initial Bitcoin block size was 1 MB, which could hold about 2,759 transactions. One way to increase the speed would be to make the blocks bigger to hold more transactions. Thus, processing one block would process many more transactions. Another way would be to speed up the process of identifying the unique hash code of the block, i.e., Bitcoin mining. Making the code less difficult might sacrifice security. Another way would be to speed up the way that the computers maintaining the blockchain database are updated as new blocks are created. If each of the computers maintaining the blockchain accounting data is not updated before a new transaction is processed, there might be a possibility for double spending.
Various new coins have tried variations on these changes. Bitcoin Cash enlarged the old Bitcoin block size, as did Dogecoin and Litecoin. Technological increases in computer processing speed and data transmission speed would also increase the number of transactions handled without changing the Bitcoin algorithm. The main downside of increasing processing speed by changing the verification process would be loss of security. If data is not completely verified before a new transaction is entered, for example, a Bitcoin could be spent twice.
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