Blockchain technology has always promised decentralization, but in the world of finance, speed is king. Traditional financial markets move at lightning speed, with milliseconds making or breaking deals. This is where Web3, the decentralized web, falls short. Networks like Ethereum can only process around 15 transactions per second, a far cry from Visa’s 24,000 transactions per second.
Since the internet revolutionized finance, speed has been a critical factor in every aspect of the industry. Whether it’s seizing an arbitrage opportunity or receiving crucial funds in time, speed is essential. However, traditional finance is still riddled with hidden fees and exclusivity, keeping the majority of users locked out.
Bitcoin, the first and most well-known cryptocurrency, has a block time of 10 minutes and can handle only 10 transactions per second. Ethereum, while an improvement, still lags behind with an average of 14 transactions per second and high gas fees. In comparison, the NASDAQ processes 20,000 transactions per second on average, highlighting the significant gap between blockchain systems and traditional financial platforms.
Despite the principles of decentralization and trust in blockchain, many users prioritize speed and efficiency over these ideals. This has led to the rise of performance-focused chains like Solana, with 400-millisecond block times and support for up to 3,000 transactions per second. Platforms like Hyperliquid have also gained traction, showcasing the increasing preference for speed over decentralization.
However, achieving a balance between performance and decentralization is crucial. Projects can implement strategies such as batching transactions, using off-chain order books, and optimizing state differences to reduce gas costs and latency. The ultimate goal is to create a platform that combines the best of both worlds: decentralization and performance on par with centralized alternatives like Revolut.
In the quest for the next generation of finance, speed will be the defining factor. The builders who can deliver Web2-grade speed without compromising openness will shape the future of finance. Once blockchain technology can match the speed and efficiency of traditional financial systems, we will usher in a new era of seamless, decentralized finance that operates as smoothly as the internet itself.