Throughput is a measure of how many transactions a blockchain can process in a certain period of time. Throughput is usually calculated in Transactions Per Second (TPS). Throughput is a very important metric because it determines the usability and scalability of a blockchain.
When a blockchain has a low throughput, it may not be able to handle high volumes of transactions, leading to transaction congestion, slow transaction times, and high transaction fees. On the other hand, a blockchain with high throughput can handle many transactions quickly and efficiently, making it ideal for payments and decentralized applications (DApps).
Some high-throughput blockchains such as Solana can process a maximum of 65,000 TPS for simple transactions such as sending crypto assets from one wallet to another. In addition, there are layer 2 blockchain technologies that can process up to 40,000 TPS such as Arbitrum, Optimism, Polygon, Immutable X, and others.
Learn more about Layer 2 technology in this article.
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