In order to enhance the adoption of cryptocurrency globally, crypto companies are working hard to come up with their use cases. While decentralization continues to remain the strongest part of the crypto appeal, some digital coins are also gaining popularity owing to their high transactional speeds. A case in point is ripple, which can process 1500 transactions per second (tps), making it a commendable player in the financial technology domain.
Crypto networks Vs. established payment gateways
The ripple’s 1500 tps pales into insignificance when compared against 24,000 tps of VISA. Just so you know, VISA is a pioneer in the field of payment processing segment and has an operational history of around 60 years. VISA has the highest speed among all the given networks and its dominance is still unchallenged by a humongous margin. But that is not the case with other conventional payment gateways. Take, for instance, the Paypal. The company has a payment processing speed of 193 tps and compared with Ripple, Paypal is nowhere in the reckoning.
Unlike the ripple, other leading cryptocurrencies such as Bitcoin, Dash, Bitcoin Cash, Ethereum, etc., don’t have a high tps speed and part of this issue can be attributed to their high popularity. The customers’ patronage of these digital coins has outstripped their network processing capabilities and this is the reason why users encounter some delay while processing transactions. Still, the high tps exhibited by the ripple despite being a new kid on the block is really encouraging.
Will Crypto companies replace Conventional Players?
Now the million-dollar question arises whether in the future cryptocurrencies will be able to replace payment processing measures such as VISA, MasterCard, or PayPal. The answer to this lies in the capabilities of cryptocurrencies to ramp up their networks’ processing abilities. While Ripple has already shown promising progress on this front, other digital coins also need to put a considerable effort into elevating their tps to present themselves as a credible alternative to the conventional payment processing gateways.
Of course, it is no mean feat to accomplish given the present scenario where you cannot compare Bitcoin’s tps (which is abysmally low rated at 7) with the VISA’s speed of 24,000 tps, but factors that favor the digital coins is their novelty factor, absence of any third-party interference, and more importantly, the negligible processing cost associated with their transactions. A person using digital coins will be better off in terms of increasing the cost related to the transaction and this makes even more sense when money transfer has to be done overseas. In fact, remittance is the segment where the cryptocurrency and blockchain can prove extremely beneficial for the sender as well as receiver and makes a very strong case for their use.
In order to replace the conventional payment processing networks, the cryptocurrency industry requires a strong network with considerably higher tps. The move requires investment in the infrastructure with a special focus on enhancing the network capability to handle and process a higher number of transactions per second. Not only will this help in solving the issue of higher processing time, but in the long run, superior network capabilities will also help to widen the scope and adoption of cryptocurrencies among masses.