Block Space Efficiency

Definition ∞ Block space efficiency quantifies how effectively the limited data capacity of a blockchain block is utilized for processing transactions and storing information. It relates to maximizing the number of useful operations or data points that can be included within a block, thereby optimizing network throughput and minimizing transaction costs. Techniques such as data compression, transaction batching, and witness segregation contribute to improving this metric. Higher efficiency allows more activity per block.
Context ∞ Block space efficiency is a critical metric frequently discussed in blockchain development and news, especially concerning network upgrades aimed at scalability and cost reduction. Reports on protocol improvements like SegWit or rollup technologies often highlight their impact on this specific performance aspect. The ongoing pursuit of greater efficiency addresses network congestion and supports broader adoption of decentralized applications.