Transaction Capacity

Definition ∞ Transaction capacity refers to the maximum number of transactions a blockchain network or distributed ledger can process and confirm within a given timeframe, typically measured in transactions per second (TPS). This metric is a critical indicator of a network’s scalability and its ability to handle user demand. Higher transaction capacity generally translates to faster and cheaper transactions. It directly impacts network usability and adoption.
Context ∞ The discussion surrounding transaction capacity is a central theme in the ongoing scalability debates within the blockchain industry. Key debates involve various solutions like layer-two protocols, sharding, and alternative consensus mechanisms aimed at increasing throughput. Future developments are directed towards implementing and refining these scaling technologies to support global adoption and diverse application requirements.