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Crypto Terms:  Letter B
Jun 19, 2023 |
updated Apr 02, 2024

What is Bandwidth?

Bandwidth Meaning:
Bandwidth - the amount of data that can be transmitted per second.
3 minutes

Let's find out Bandwidth meaning, definition in crypto, what is Bandwidth, and all other detailed facts.

Bandwidth can be mistaken for internet speed, nonetheless, it is the amount of data capacity available on a network for transactional activities. To be precise, it is measured by the number of megabytes or gigabytes per second that are processed on a network.

You can also measure bandwidth by transmitting a file, or multiple files, counting the time of transfer also knowing the size of the file. The result is changed to bits per second by dividing the file size by the time necessary for the transmission.

Many internet speed tests utilize this approach to calculate a user's computer's connection speed to the internet.

However, bandwidth has a limit. When the threshold is reached, the data flow becomes insufficient to handle the volume, and all connections slow down.

Furthermore, speed shows how quickly the information is processed. Bandwidth, on the other hand, shows how much information reaches you per second. As an example, let’s say you are making yourself a cup of black coffee from an espresso machine. 

If the holder is wider, it fits a larger coffee capsule, therefore, more coffee will flow at a faster speed. So, the pace of how fast the cup of coffee gets full is the speed, and bandwidth is the coffee.

With blockchain technology, bandwidth might be tokenized and turned into a marketable and changeable asset. The asset could be exchanged in the same way as digital money or smart banking is. Nonetheless, instead of money, bits per second would be used.

Nowadays, blockchain allows tokenizing anything valuable. Keeping that in mind, bandwidth might assist in the future of advanced technology.

On a decentralized network, bandwidth might function as a type of currency. Stable currency should be long-lasting, consistent, divisible, and trustworthy. Bandwidth would not require a centralized financial institution to step in, since it can provide security and transparency on its own. Meaning that it can perform without the need for a central bank's assistance.

However, at the moment, bandwidth doesn’t have trustworthiness. It’s mandatory to gain belief in the system in order to survive.

Also, when several devices are connected to the same internet and performing high-capacity activities such as gaming, streaming, or watching a movie, additional bandwidth is required. Extra bandwidth ensures that devices maintain the same speed. After all, everyone wants their computer to work as quickly as possible.

To be fair, bandwidth is super valuable, because it has limited resources. Similarly to cryptocurrencies. Besides, the infrastructure is developed to be able to deal with any circumstances.

Since bandwidth is valuable due to scarcity, it is also relatively expensive. In that regard, the internet depends on it to operate and exist, so bandwidth has tangible worth. And the need for high-speed technology, like the demand for computer resources, is growing by the day.

It is difficult to generate more bandwidth while the currency keeps its value. To see a rapid increase, people or local companies might need to take part in constructing the required infrastructure.