If there’s one thing blockchain has improved over the past few years, it’s speed. Scalability is a key priority for almost all blockchain networks today, and significant progress has been made to dramatically increase throughput. One of the best examples of this is Ethereum. Ethereum was once painfully slow, with only a few transactions per second. But thanks to the move to Proof-of-Stake and the advent of Layer 2 scaling networks, we can now process thousands of transactions in seconds.
Impressive advances in blockchain scalability were highlighted in a recent report by a16z crypto, which found that throughput has increased 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 they now have a staggering 3,400 TPS of processing power, up from just 340 TPS five years ago.
These numbers suggest that blockchain is much faster than many of the world’s most reliable financial systems. For example, payment processor Strip could only process about 2,300 TPS during Black Friday and Cyber Monday, while the Nasdaq stock exchange has a processing capacity of about 2,400 TPS.
I don’t need speed anymore
Of course, decentralized networks still have room for improvement and cannot yet match the lightning-fast processing speeds of credit card networks such as VISA, which can deliver over 24,000 TPS. However, COTI CEO Shaf Bar Geffen said there is no need to achieve such speeds to support most institutional requirements.
According to Geffen, blockchain is fully institutionalized in terms of its ability to process transactions quickly enough. “There are always further improvements in terms of scalability, but speed and cost are no longer the inhibiting factors,” he said. “If you are building a dApp that relies on Visa-level TPS, there are many chains that can meet this benchmark.”
It is difficult to refute such claims. According to a16z crypto report, blockchain averages 3,400 TPS, but there are several chains that can process transactions much higher than this. For example, Solana leverages a novel combination of proprietary Proof of History and Proof of Stake mechanisms to achieve an impressive 65,000 TPS, which puts even VISA’s network to shame.
The report also shed light on the cost-effectiveness of blockchain transactions, showing that most networks are far more affordable than traditional payment rails, once again putting many competitors to shame. In fact, some blockchains, such as Nano and IOTA, charge no fees at all, while others, such as Solana and Tron, have supported transaction costs of less than a few cents for years. Even Ethereum, once notorious for congestion fees of over $100, has minimal gas costs through various L2 scaling solutions such as Abritrum and Polygon.
Geffen said the widespread availability of sub-cent transactions on the L2 network is a factor driving institutional adoption of blockchain and is one of the main reasons why stablecoin transaction volume exceeded $46 trillion last year. “For institutions, the ideal cost baseline is something like $0.01 per transaction,” Geffen said. “Under that, on-chain economics will significantly reduce the fees charged by traditional rail, especially for cross-border and high-frequency payments.”
So, with its rapid throughput and industry-beating cost-effectiveness, does that mean blockchain is now poised for mainstream adoption among the world’s financial powers? Not yet, says Geffen, because there’s still one more problem to solve. It’s blockchain transparency, which is often touted as one of its key benefits, but has become a major headache for institutional users.
“What will really expand the adoption of blockchain is its interaction with privacy,” Geffen said. “That hasn’t happened yet. If a financial institution sends $1 billion to a foreign subsidiary through traditional banking rails, no one knows about it except the counterparty and the bank involved. But if you do it on-chain, everyone knows.”
Why transparency matters
Transaction privacy is essential for financial institutions because financial transactions are among the most sensitive secrets and no one wants their transactions to be made public. Without privacy, an organization’s competitors can analyze its business strategy and come up with more effective strategies to steal customers or replicate trading patterns to their advantage.
Additionally, a company’s financial transactions can reveal other secrets, such as the sourcing of critical components, inventory levels, and relationships with partners. Public disclosure of transaction information may also violate non-disclosure agreements and compliance requirements.
Second, there are security reasons. Wallets that regularly send and receive millions of dollars worth of funds attract attention, become targets for repeated hacking and phishing, and increase the risk of your money being stolen. Companies may also be subject to regulations such as Europe’s GDPR, which anonymize certain data and require users’ consent to share certain types of information.
“Traditional financial institutions and large investors often have strict requirements regarding customer confidentiality,” Geffen said. “The lack of privacy in RWA tokenization makes it difficult for these institutions to participate without potentially violating client confidentiality agreements or regulatory requirements. This privacy concern has significantly hindered institutional participation in the RWA tokenization market.”
However, not all blockchains are as transparent as Bitcoin or 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 all types of surveillance technology.
Transactions on these blockchains are truly untraceable, Geffen said. However, these blockchains remain unsuitable for institutions as they lack the nuance necessary for important compliance purposes. “The first wave of privacy protocols were great at hiding everything, making every transaction invisible to prying eyes,” he said. “The second wave of privacy protocols are not only more granular in terms of the privacy controls they enable, they are also much more scalable and can now mask on-chain transactions without measurably increasing costs or slowing payments.”
Geffen was referring to a new breed of blockchain that implements “programmable privacy” controls that support so-called “selective disclosure.” This allows users to give selected users permission to view their transaction history, while preventing others from seeing what they are doing. This type of opt-in privacy is urgently needed as companies deploy blockchain-based payment rails and maintain compliance in the jurisdictions in which they operate.
“At COTI, we have supported this Privacy 2.0 movement by allowing institutions to settle privately while allowing regulators to investigate where necessary,” Geffen said. “This capability will accelerate mainstream payments and enable blockchain rail to become the preferred pathway for institutions moving trillions of dollars.”
Privacy is the last battle
The dramatic increase in blockchain transaction throughput suggests that the industry’s “scaling wars” may be nearing an end, as most networks are already fast enough for the majority of users. After all, there’s little point in trying to make the blockchain even faster if no one is actually benefiting from it.
So the real battle will be on privacy, but most blockchains still leave a lot to be desired. “Fortunately, the tools to accomplish this are readily available today, but they just aren’t widely integrated,” Geffen said. “Having access to privacy across all dApps, protocols, and networks at the click of a button will revolutionize adoption in educational institutions.”
