Transaction speed is the time it takes for the network to complete one operation. Why is it important for cryptocurrencies to have a high transaction speed? Well, the higher the exchange speed, the faster a transaction is finished; hence a user is more satisfied. Let’s see which of the existing digital coins are the fastest and if they are able to outperform traditional payment systems.
Changelly prepared a list of cryptocurrencies that have the highest transaction speed on the market. In this article, we will also compare blockchain-based networks to conventional money transfer systems and see which ones are more efficient in terms of transaction time.
Traditional Payment Systems vs. Cryptocurrencies
There are several well-established fiat payment systems: Visa, MasterCard, PayPal, and some others. It feels like they have been around forever and it’s just how the money transfer industry works. For a while now, there’s been an alternative to traditional payment systems – blockchain-based cryptocurrencies: Bitcoin, Ether, Ripple, Litecoin, and more. Let’s make a small comparison that shows us the differences between bank wires and typical Bitcoin transactions.
Purchasing with VISA card
Purchasing with Bitcoin
The payer uses a physical wallet
The payer uses an electronic wallet
The purchase can be refunded
The transaction is irreversible
Might have high fees
The sum of fees depends on the network congestion
Requires three or more parties
Requires only two parties
Let’s stop on the last line. As you can see, there can be more than three parties only in one transaction. What are they? Here is a typical Visa transaction which includes four parties:
Acquirer (the actual financial institution that enables payments for the merchant)
Issuer (cardholder’s bank)
Here is the thing. To make a payment, you need to wait for the approval of three parties. It can take quite a big amount of time.
In recent years, fiat payment systems have been failing to provide fast and secure service to their clients over and over again. That’s when the blockchain-based digital coins started taking the stage. For example, the Ripple payment protocol has been adopted by more than 100 banks. The financial institutions started using XRP in order to provide faster money transfers to their clients.
Traditional payment systems particularly struggle with international transactions. Whereas blockchain-based networks, being decentralized and not tied up to any particular country, process money transfers from any corner of the world in a matter of minutes or even seconds.
Bank wires usually take up to five days if we are talking about international transactions and twenty-four hours for domestic ones. They can also be delayed because of different kinds of technical difficulties or on holidays and weekends. Blockchain-based payment systems work on relatively high speed no matter what.
At the same time, traditional systems’ transaction time is relatively humble. The renowned money transfer platform PayPal goes at 193 transactions per second. Compare it to the abovementioned Ripple’s XRP: the network processes over 1700 transactions per second. It is roughly the same amount of TPS that Visa, payment systems’ top dog, handles.
It’s worth noting that blockchain-based networks are constantly decreasing their transaction time and endlessly testing new ways of boosting the transaction speed. It is harder for traditional money transfer platforms to advance in that field because the technology behind them has been the same for decades, and there is not much space for improvement.
Now, let’s review the cryptocurrencies with the highest transaction speed in 2020.
Top 5 Fastest Cryptocurrencies
According to CoinMarketCap, there are over 6000 digital coins on the market, and the №1 cryptocurrency by market cap, Bitcoin, is by far not the fastest one. Here are the Top 5 flash-like coins that make the transaction time of Bitcoin seem like an eternity.
This digital coin is one of the hottest on the market right now. EOS promotes scalability and focuses on eliminating transaction fees. EOS transaction speed is around 3000 TPS – the highest among cryptocurrencies.
Tron provides users with up to 2000 TPS transaction time and minimal transaction fees. This network was created to advance the entertainment industry’s decentralization and help developers make DApps using Tron’s smart contracts.
Ripple works at a faster speed than popular traditional money transfer services. XRP transaction time is 1700 TPS. This platform aims to become the next big thing in the payment systems industry and is already widely used by banks worldwide. You can read more about Ripple in our blog, for instance, Ripple’s Price Prediction.
XLM transaction time is around 1000 TPS. This digital ecosystem provides a fast, cheap, and secure way to transfer funds across borders. It is often compared to PayPal and other e-commerce platforms but has a higher transaction speed than most of them.
Cardano is a decentralized advanced smart contract network powered by a coin called ADA. Its transaction speed reaches 1000 TPS. The platform works on the Proof of Stake algorithm and tries to solve the scalability problem.
Transaction speed defines how fast the network works: how many operations per second it can process. It is crucial to the digital coin market because most users rely on cryptocurrencies for security and transparency, and short transaction time.
Traditional payment systems often struggle to provide high exchange speed. Platforms like Visa and PayPal offer the speed of 1700 and 193 transactions per second accordingly. International money transfers through banks can take up to five days, local ones – up to 24 hours. There could be possible delays on holidays and due to unforeseen circumstances.
As of September 2020, the Top 5 digital coins with the highest transaction speed per second are EOS (3000 TPS), Tron (2000 TPS), Ripple (1700 TPS), Stellar Lumens (1000 TPS), and Cardano (1000 TPS).
By the way, you can replenish your investment portfolio with any of these cryptocurrencies. Changelly offers you the best rates to purchase or exchange the fastest crypto coins.