Transferring bitcoins be like

Need for Speed: Which Crypto is the Fastest?

May 24 by Leonardo Siligato

Virtually all cryptocurrencies created after bitcoin claim to be faster than their predecessor. Whenever you read one of their sales pitches, it always plays up its transaction speed and how it’s much faster than that of bitcoin. But how much quicker? And which is actually the fastest?

For all those nerdy enough to ask these questions, here’s a ranking of all the cryptocurrencies on BUX in terms of transaction speed, from the slowest to the speediest.

5. Bitcoin: Like watching sloths race
Bitcoin’s slow transaction speed remains a huge bane for many. The block size determines how many transactions Bitcoin can support per second. With its blocks currently limited to a maximum capacity of 2MB, Bitcoin’s network can only handle less than 10 transactions per second. By comparison, PayPal averages close to 200 transactions per second.

Why the limit? Apparently, it was introduced to counter risks related to spamming and distributed denial of service (DDoS) attacks. You can read more about why block size matters here.

Despite this problem, bitcoin remains the most popular crypto to hold as a store of value. Partly because it was the first to be introduced – call it the first mover advantage. It commands a lion’s share of the total crypto market – currently over a third. These are all reasons why people have more trust in bitcoin than they do in other cryptos.

But popularity is a double-edged sword. Thanks to increasing traffic in the bitcoin network, the processing time for transactions is getting longer. It can take over an hour or even days in extreme cases for a transaction to go through.

4. Ethereum: Faster – but speed bump ahead
The second biggest crypto in the world by market capitalisation is faster than the first – but it’s still not fast enough for some. The Ethereum blockchain can verify an average of 20-25 transactions per second. While this means Ethereum transactions can take just several minutes to confirm, the situation might soon be quite different.

As Ethereum is a platform for decentralised apps, or dApps, this has resulted in a surge of transactions. Some Ethereum game dApps, like CryptoKitties, have gone viral, resulting in a massive number of transactions that have clogged up the network. This illustrates the vulnerability of the Ethereum blockchain, leading to doubts about whether it can scale.

To solve the problem, developers are working on a new protocol called Casper, which should speed up the mining process. Casper is expected in the late summer or fall of this year, and will be implemented through a “hard fork”, that is a split of the Ethereum blockchain.

3. Litecoin: Cranking it up a notch
Litecoin was created with the precise – or we can even say the only – aim to be faster than Bitcoin. In fact, the technology on which it is based is very similar to that of its predecessor and does not seem to offer other advantages apart from faster transaction speed. Its network can validate over 50 transactions per second.

2. Bitcoin Cash: The speedier alternative to Bitcoin
It’s like Bitcoin on Gatorade. That’s one way to think of Bitcoin Cash, which came into existence following a Bitcoin hard fork. It shares virtually all of Bitcoin’s features but its key distinction is its 8MB block size limit, allowing it to handle more than 60 transactions per second.

1. Ripple: Move aside, Lewis Hamilton
In pole position is Ripple, whose network can deal with 1,500 transactions per second without a hitch. It can even reportedly handle up to 50,000 transactions per second. To put things into perspective, that’s about double the transaction speed of Visa. That’s no mean feat, given Visa processes the payments of hundreds of millions of people worldwide.

Currently, a Ripple transaction takes only 4 seconds on average to be confirmed. Now we’re talking, right? If you’re aiming at becoming the new worldwide standard for money transactions, speed is the name of the game. And Ripple is clearly ahead of the pack.

Written by

Leonardo Siligato

Holds a degree in Economics and Finance from Bocconi University, where he also worked as a research assistant for a while. After several years at Italian national all-news radio station Radio 24, he now delivers financial news and articles at BUX. A mountain enthusiast, he could not have chosen a better place to pursue his passion than the Netherlands… Look him up on BUX: @Siligon_Valley

Disclaimer: All views, opinions or analysis expressed in articles are that of the author and do not represent the views of BUX. Neither BUX nor the author provide financial advice and these articles should not be construed as such.

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