Blockchain Throughput: Study Find Claims Overstated by 75%

A new study by Steven Pu, cofounder of the Layer 1 blockchain Taraxa, has disclosed a big gap between advertised and actual blockchain throughput. 

According to data from Chainspect, it was revealed that theoretical throughput is, on average, “overestimated by a whopping 75.46%” compared to real-world performance. 

Performance Figures Do Not Reflect the Reality

Likewise, the research posited that blockchain projects “overstate theoretical throughput by an average of 20 times.” 

This suggests that many transaction speeds mentioned in whitepapers and marketing promotion materials are far higher than blockchains can deliver.

Notably, the study examined 22 blockchains and compared their advertised transaction speeds with actual performance on public networks. However, it revealed that most blockchains conduct tests under ideal conditions, using private networks and high-end hardware inaccessible to everyday users. As a result, the numbers promoted to investors often fail to hold up in real-life cases.

“This results in performance claims that look impressive on paper but do not hold up in practice,” Pu wrote in the report. 

He also noted that blockchain networks struggle to match their stated capabilities when real-life factors such as network congestion and hardware limitations come into play. Therefore, stakeholders relying on these figures may have unrealistic expectations about the scalability of these projects.

High Costs for Limited Throughput

In addition to the performance gaps, the study also examined the financial cost of running a validator node. It discovered that only 4 out of 22 blockchains amount to a double-digit TPS/cost ratio. Put differently, most networks require high expenditures to deliver even modest transaction speeds.

Similarly, Pu added that many networks “require expensive hardware just to achieve modest transaction rates,” calling this “neither technically impressive nor decentralized.” 

Since decentralization is a key selling point for blockchain technology, networks dependent on costly infrastructure may not be as decentralized as they claim.

Call for Transparency in Blockchain Metrics

Following these findings, Pu calls for blockchain projects to adopt more transparent reporting standards. He recommends taking the focus from theoretical throughput to real-life transaction speeds and cost efficiency. 

His approach calculates transactions per second per dollar spent on a validator node (TPS/$), providing a clearer picture of blockchain scalability.

“Investors, developers, and users deserve transparency,” Pu said, stressing that the industry has been “obsessed with theoretical performance figures” that do not translate into practical use. 

Therefore, he urged blockchain projects to move toward “meaningful performance metrics that impact usability, cost-efficiency, and decentralized adoption.”

Meanwhile, Singapore-based crypto mining rig manufacturer Bgin Blockchain Limited has filed for an initial public offering (IPO) in the United States, aiming to raise $50 million.