If there’s one thing that blockchain has gotten better at over the years, it’s speed. Scalability is a major priority for just about 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 at just a handful of transactions per second. But thanks to its transition to Proof-of-Stake and the emergence of Layer-2 scaling networks, it can now process thousands of transactions in seconds.
### Blockchain Throughput: A 100x Increase
The impressive strides made in blockchain scalability were illustrated in a recent report by a16z Crypto, which found that throughput has increased by more than 100 times in the last five years. The *2025 State of Crypto* report examined the average processing speed of dozens of major blockchain networks and found that they can now process an astonishing 3,400 transactions per second (TPS), up from just 340 TPS five years ago.
These numbers suggest that blockchain is now much faster than many of the world’s most reliable financial systems. For instance, the payments processor Stripe was only able to process around 2,300 TPS during Black Friday and Cyber Monday, while the Nasdaq stock exchange is capable of approximately 2,400 TPS.
### No More Need For Speed?
Of course, decentralized networks still have room for improvement and cannot yet match the blazing-fast processing speeds of credit card networks like Visa, which can facilitate more than 24,000 TPS. But it doesn’t need to attain such speeds to support most institutional requirements, says COTI CEO, Shahaf Bar Geffen.
According to Geffen, blockchain is absolutely institutional-ready in terms of its ability to process transactions rapidly enough.
> “While there are always further improvements that can be made in terms of scalability, speed and cost are no longer deterrents,” he said. “If you’re building a dApp that’s reliant on Visa-level TPS, there are numerous chains capable of meeting this benchmark.”
It’s hard to argue with such claims. While a16z Crypto’s report states blockchains average 3,400 TPS, several chains can process far more transactions than this. Solana, for example, utilizes a novel combination of unique Proof of History and Proof of Stake mechanisms to achieve an eye-watering 65,000 TPS, putting even Visa’s network to shame.
### Cost-Effectiveness: A Key Advantage
The report also highlighted the cost-effectiveness of blockchain transactions, once again surpassing many traditional payment systems. Some blockchains, such as Nano and IOTA, don’t charge any fees at all, while others like Solana and Tron have long supported sub-cent transaction costs.
Even Ethereum, once notorious for congestion-driven $100+ fees, has achieved minimal gas costs through various Layer-2 scaling solutions, such as Arbitrum and Polygon.
Geffen noted that the widespread availability of sub-cent transactions on Layer-2 networks has been instrumental in driving institutional adoption of blockchain, contributing to stablecoin transaction volumes exceeding $46 trillion in the past year.
> “For institutions, the ideal cost threshold lies around $0.01 per transaction,” Geffen said. “Below that, on-chain economics crushes the fees levied by traditional rails, especially for cross-border or high-frequency settlements.”
### Is Blockchain Ready for Mainstream Institutional Adoption?
With rapid throughput and industry-beating cost-effectiveness, is blockchain now primed for mainstream adoption among the world’s financial powerhouses? Not yet, according to Geffen. There’s still one more problem to solve: blockchain’s transparency.
While transparency is often touted as a major benefit of blockchain, it poses significant challenges for institutional users.
> “It will be the interplay with privacy that truly scales blockchain adoption,” Geffen said. “It’s not there yet. When an institution wires $1 billion to an overseas subsidiary through traditional banking rails, nobody apart from the counterparties and the banks involved will know about it. But if you do that on-chain, everybody sees.”
### Why Transparency Is a Problem
Transaction privacy is essential for institutions because their financial dealings are among their most important secrets. They don’t want their transactions publicly exposed.
Without privacy, competitors can analyze an institution’s business strategies and develop more effective ones to steal customers or replicate trading patterns to match profits. Additionally, financial dealings might reveal critical information such as sourcing, inventory levels, and partner relationships.
Public disclosure of transaction information could also violate non-disclosure agreements and compliance requirements.
There are also security concerns. Wallets regularly sending and receiving millions of dollars attract attention and become targets for hacking and phishing attempts, increasing the risk of theft.
Businesses must also comply with regulations like Europe’s GDPR, which requires certain data to be anonymized and demands user consent for sharing some types of information.
> “Traditional financial institutions and large investors often have strict requirements for client confidentiality,” Geffen explained. “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 significantly deters institutional participation in the RWA tokenization market.”
### Privacy Coins and Their Limitations
Not every blockchain is as transparent as Bitcoin and Ethereum. Privacy coins such as Monero and ZCash have been around for years and have proven to be essentially immune to surveillance techniques.
Transactions on these blockchains are truly untraceable, Geffen said.
However, these blockchains remain unsuitable for institutions due to their lack of nuanced compliance features.
> “The first wave of privacy protocols were great at concealing everything, rendering all transactions off-limits to prying eyes,” he said. “The second wave of privacy protocols aren’t just more granular in terms of the privacy controls they enable, but they’re much more scalable, allowing on-chain transactions to be masked without discernibly increasing costs or slowing settlement.”
### The Rise of Programmable Privacy
Geffen was referring to a new breed of blockchains that implement “programmable privacy” controls supporting what’s known as “selective disclosure.” This technology allows users to grant permission to selected parties to view their transaction history while keeping it hidden from everyone else.
This kind of opt-in privacy is urgently needed by enterprises to adopt blockchain-based payment rails while maintaining compliance across jurisdictions.
> “At COTI, we’ve been supporting this Privacy 2.0 movement by allowing institutions to settle privately while ensuring that regulators can still look in where needed,” Geffen said. “This capability will accelerate mainstream settlement, allowing blockchain rails to become the preferred conduit for institutions moving trillions of dollars.”
### Privacy Is the Final Battle
The dramatic increase in blockchain transaction throughput suggests that the industry’s “scaling war” may be coming to an end since most networks are already fast enough for the vast majority of users. There’s limited benefit in pushing for even greater speeds if no one will truly benefit.
As such, the real battle now centers on privacy — an area where most blockchains still have a long way to go.
> “Fortunately, the tools to achieve this are now readily available, they’re just not widely integrated,” Geffen said. “Once privacy can be accessed across every dApp, protocol and network at the click of a button, the stream of institutional adoption will turn into a torrent.”
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Blockchain technology has made remarkable progress in speed and cost-effectiveness, positioning itself as a serious contender for institutional use. However, achieving the right balance of privacy and transparency remains essential for unlocking its full potential in the world of finance. The future of blockchain adoption lies in enhancing privacy without sacrificing compliance or regulatory oversight — a goal that promises to redefine how institutions move trillions of dollars globally.
https://bitcoinethereumnews.com/blockchain/blockchain-is-fast-enough-for-institutional-adoption-but-what-else-does-it-need/
