What are Performance Indicators?
Performance indicators, also known as KPIs, are like special measuring tools for IT and blockchain. They help people see how well these systems are doing their jobs. KPIs are important because they help organizations keep an eye on things like how safe, fast, and reliable their systems are. They use these measurements to make decisions and make sure everything works well for users. For example, they might check how often a server is working or how many transactions a blockchain can handle. KPIs are like a helpful guide to keeping computer systems and blockchains running smoothly.
Key performance indicators used to measure the performance of a blockchain network include:
*Transactions Per Second (TPS)
TPS is a crucial metric in the blockchain sector, it represents the number of transactions a blockchain can handle in a single second. It is a key factor for assessing a blockchain’s scalability and its data processing capacity. To gain a more precise understanding, it is possible to separately measure the number of transactions submitted to the blockchain and the number of transactions permanently recorded in the ledger. This approach enhances clarity and yields more accurate insights into blockchain performance.
However, blockchain with high TPS value is not necessarily superior to other available options, and many other factors should be considered. For example, the TPS value of BTC is very low, but there are thousands of nodes at any time, which makes BTC one of the most popular blockchains.
*Transaction Latency
Transaction latency refers to the time between the submission of a specific transaction to the block and its approval or rejection. Once a transaction is approved, we can see and use it throughout the entire blockchain.
This key indicator is helpful to compare the ability of blockchain to react quickly to transactions, which is a key aspect in any sense.
*Transaction throughput
Transaction throughput is the time required to add an effective record to the block. The corresponding time is calculated only after the relevant record has been approved. Other time is not taken into account.
To calculate transaction throughput, simply divide the total number of records added to the block by the total time in seconds.
*Energy Efficiency
Although energy efficiency is not a direct network performance indicator, it plays a crucial role, considering the global energy shortage and the increasing consensus on saving energy worldwide.
Blockchain needs a certain amount of energy to play its role, mainly for transaction validation, processing, and storage. The energy consumed here largely depends on the consensus mechanism adopted.
Although most major blockchains use the PoW (Proof of Work) model, which is a high-energy-consuming model, various new blockchains rely on more advanced and low-energy-consuming PoS (Proof of Stake) or PoA (Proof of Authority) mechanisms.
Therefore, before selecting the next blockchain development project, please make sure to check which consensus mechanism is used.
*Number of verifiers
Validators are individuals with expertise in blockchain who verify transactions in return for rewards, ensuring the blockchain’s integrity. Validated transactions are then recorded in the blockchain ledger. Whenever a transaction is initiated, validators include it in a block for verification.
Once a block is completed, it is stored on the blockchain and cannot be modified. All of these tasks are performed by validators. Therefore, the more validators there are, the better the performance of the blockchain!
*Block time
Block time is the amount of time required for validators or miners to validate the transactions stored in the block. Once completed, another transaction is created. The total time required for these steps is block time.
Additionally, miners or validators who participate can receive rewards, depending on the mechanism of a particular blockchain.
It’s essential to bear in mind that every new block generated within the blockchain contains a reference to the preceding block. Consequently, altering or deleting blocks from the blockchain is not a feasible option.
By leveraging the six pivotal metrics used to assess blockchain network performance, we can readily make informed comparisons and selections from among the numerous blockchain alternatives at our disposal.
Nonetheless, when embarking on a project, such as the development of a DAPP or the minting of NFTs, it becomes imperative to take into account the availability of EVM-compatible tools, as well as factors like TPS and associated fees.
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