For someone new to the blockchain universe or unfamiliar with the technical details, the idea that blockchains sometimes can’t process transactions instantaneously might be bizarre to them. Afterall, blockchains has countless nodes that run on some of the most powerful machines in the world. The reason for this delay in processing transactions is that confirmation isn’t governed by just raw computational horsepower. Instead, there are many foundational architectural choices aimed at making blockchains reliable, secure, and decentralized, which makes this harder than it seems.
Consensus Over Speed
Unlike most modern systems that are centralized and simply require a central party to process the transactions instantly, blockchains rely on consensus mechanisms to ensure all participants in the network agree on the next set of transactions. It does not matter if it is a Proof of Stake or a Proof of Work network; both require network-wide agreement, which can take time. All transactions must be verified and confirmed by validators and miners, and these gatekeepers themselves have their actions on the network heavily scrutinized and communicated for approval. There is an unavoidable latency that comes from this level of coordination across so many independent machines that no amount of CPU speed can totally make up for.
Decentralization and Network Propagation
The decentralized nature of the blockchain is akin to a distributed system. Every transaction detail must be communicated to countless nodes across the world, and even with the fastest computers, this is bound to introduce some network propagation delays. Each transaction must be seen, stored, and validated by each node before consensus is reached. This thoroughness is responsible for the secure and censorship-resistant nature of the blockchain, though it comes with a latency cost.
Security and Block Timing
There are often specified intervals for block creation on a blockchain that differ by chain. Bitcoin has a protocol that puts block creations about 10 minutes apart.
Trade-offs: Throughput vs. Decentralization
What this has shown is that there is a large tradeoff to be made in the blockchain industry between speed and decentralization. For instance, some newer entries into the industry have been trying to achieve lower latency by cutting the number of validators or using innovative architectures.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
