Crypto Terms: Letter T

What is Throughput?

Throughput MEANING:
Throughput - is used to measure the number of actions that can be carried out within a specific time.
1 minute

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

Throughput is a term that describes the number of actions that can be carried out within a specific time. 

When it comes to the crypto sector, throughput defines how fast transactions can be processed in a blockchain

Blockchains employ consensus protocols, also referred to as consensus mechanisms or consensus algorithms, which enable to determine the throughput of a decentralized protocol’s transaction. 

Throughput is often expressed in transactions per second (TPS). Sometimes it’s also expressed as transactions per minute (TPM) or transactions per hour (TPH) depending on the situation.

There are various elements that influence the throughput of a transaction including the size of a block, how complex a transaction is, and traffic. When it comes to traffic, keep in mind that it defines the network’s load during a certain period of time. Therefore, if the load increases, the speed decreases. 

As mentioned above, the complexity of a transaction can determine how fast said transaction is completed. For instance, since Ethereum’s transactions tend to be more complex, Bitcoin can carry its own transactions at a faster pace. 

There are ways to improve throughput by increasing the size of the blocks or applying various methods like rollups or sidechains.