Systemic Bottleneck

Definition ∞ A systemic bottleneck refers to a point of congestion or limitation within a large system that impedes its overall efficiency, speed, or capacity. In financial systems, this can involve delays in transaction processing, high costs, or limited interoperability between different platforms. Identifying and addressing these points is crucial for system optimization.
Context ∞ Traditional financial systems often exhibit systemic bottlenecks in areas like cross-border payments or interbank settlements, which digital assets and blockchain technology aim to alleviate. However, blockchain networks themselves can face bottlenecks related to scalability, transaction throughput, and network congestion. Addressing these limitations is vital for the widespread adoption and efficiency of decentralized applications.