If there’s one thing blockchain has gotten better at over the years, it’s speed. Scalability is a key priority for virtually every blockchain network today and significant progress has been made, resulting in dramatic increases in throughput. One of the best examples of this is Ethereum, which was once painfully slow with only a handful of transactions per second. But thanks to the transition to Proof-of-Stake and the rise of Layer-2 scaling networks, it can now process thousands of transactions in seconds.
The impressive progress made in blockchain scalability was illustrated in a recent report from a16z crypto, which found that throughput has increased by more than 100 times over the past five years. The 2025 State of Crypto report looked at the average processing speed of dozens of major blockchain networks and found that it can now process an astonishing 3,400 TPS, compared to just 340 TPS five years ago.
These numbers suggest that blockchain is now much faster than many of the world’s most trusted financial systems. For example, the payment processor Strip was only able to process about 2,300 TPS during Black Friday and Cyber Monday, while the Nasdaq exchange can process about 2,400 TPS.
No more need for speed
Of course, decentralized networks still have room for improvement and cannot yet match the lightning-fast processing speeds of credit card networks like VISA, which can facilitate more than 24,000 TPS. But it doesn’t need to reach such speeds to meet most institutional requirements, says COTI CEO Shahaf Bar Geffen.
According to Geffen, blockchain is absolutely institutionally ready in terms of its ability to process transactions quickly enough. “While further improvements can always be made in terms of scalability, speed and cost are no longer a deterrent,” he said. “If you build a dApp that relies on Visa-level TPS, there are countless chains that can meet this benchmark.”
It is difficult to dispute such claims. Although the report from a16z crypto says that blockchains have an average of 3,400 TPS, there are several chains that can handle many more transactions than this. For example, Solana uses a novel combination of unique Proof of History and Proof of Stake mechanisms to achieve an eye-popping 65,000 TPS, putting even VISA’s network to shame.
The report also shed light on the cost-effectiveness of blockchain transactions, once again putting many of its competitors to shame, with most networks showing much greater affordability than traditional payment rails. Some blockchains – such as Nano and IOTA – charge no fees at all, while others, such as Solana and Tron, have long supported sub-cent transaction fees. Even Ethereum, once infamous for its congestion-induced fees of over $100, has achieved minimal gas costs through various L2 scaling solutions such as Abritrum and Polygon.
Geffen said the widespread availability of sub-cent transactions on L2 networks has been an instrumental factor in driving institutional adoption of blockchain, and is one of the key reasons why stablecoin transaction volumes reached more than $46 trillion last year. “For institutions, the ideal cost threshold is around $0.01 per transaction,” Geffen said. “Underneath, the on-chain economics are crushing the fees charged by traditional railroads, especially for cross-border or high-frequency settlements.”
Does this mean that blockchain, with its fast processing capacity and unparalleled cost-effectiveness, is now ready for mainstream adoption by the world’s financial powerhouses? Not yet, says Geffen, because there is still a problem to be solved. That would be the transparency of blockchain, which is often considered one of its main advantages, but causes major headaches for institutional users.
“It will be the trade-off with privacy that will really scale blockchain adoption,” Geffen said. “It’s not there yet. When an institution transfers $1 billion to a foreign subsidiary through traditional bank rails, no one will know about it except the counterparties and the banks involved. But if you do that on-chain, everyone sees it.”
Why transparency is a problem
Transaction privacy is essential for institutions because their financial transactions are among their most important secrets and they do not want their transactions to be made public. Without privacy, an organization’s competitors can analyze the business strategies and devise a more effective strategy to steal customers, or mimic the trading patterns to match the profits.
In addition, a company’s financial transactions can reveal other secrets, such as where it sources its essential components, its inventory levels, and its relationships with partners. Disclosing transaction information may also violate confidentiality agreements and compliance requirements.
Then there are safety reasons. Any wallet that regularly sends and receives millions of dollars worth of money will attract attention and become a target for repeated hacking and phishing attempts, increasing the risk of funds being stolen. Companies may also be subject to regulations such as Europe’s GDPR, which requires certain data to be anonymized and users to consent to the sharing of certain types of information.
“Traditional financial institutions and large investors often impose strict requirements on the confidentiality of their customers,” Geffen said. “The lack of privacy in RWA tokenization makes it difficult for these institutions to participate without potentially violating customer confidentiality agreements or regulatory requirements. This privacy concern significantly deters institutional participation in the RWA tokenization market.”
However, not every blockchain is as transparent as Bitcoin and Ethereum. In fact, privacy coins like Monero and ZCash have been around for years and have proven time and time again that they are essentially immune to surveillance techniques of all kinds.
Transactions on these blockchains are truly untraceable, Geffen said. However, these blockchains are still unsuitable for institutions as they lack the nuance needed for essential compliance purposes. “The first wave of privacy protocols were great at hiding everything, making all transactions inaccessible to prying eyes,” he said. “The second wave of privacy protocols are not only more granular in terms of the privacy controls they enable, but they are also much more scalable, allowing on-chain transactions to be masked without noticeably increasing costs or slowing down settlement.”
Geffen was referring to a new breed of blockchains that implement “programmable privacy” controls that support so-called “selective disclosure,” where users can give permission to select users to view their transaction history, while ensuring no one else can see what they do. This kind of opt-in privacy is urgently needed for businesses if they want to adopt blockchain-based payment rails and maintain compliance in the jurisdictions in which they operate.
“At COTI, we support this Privacy 2.0 movement by allowing institutions to go private while ensuring regulators can still intervene where necessary,” said Geffen. “This capability will accelerate regular settlement, making blockchain rails the channel of choice for institutions moving trillions of dollars.”
Privacy is the last battle
The dramatic increase in blockchain transaction throughput suggests that the industry’s “war of scale” may be coming to an end, as most networks are already fast enough for the vast majority of users. There’s not much point in trying to make blockchains work even faster if no one is really going to benefit from it.
As such, the real battle now comes down to privacy, which still leaves a lot to be desired on most blockchains. “Fortunately, the tools to achieve this are now readily available, but they are just not widely integrated yet,” Geffen said. “Once privacy is accessible through every dApp, protocol and network at the click of a button, the flow of institutional adoption will turn into a torrent.”