Capacity is a term used to describe the amount of transactions that can be processed by a cryptocurrency system. It is an important factor in determining how well the currency will perform and its overall value. Capacity is determined by two factors: block size and throughput rate.
Block Size
The maximum number of transactions per second (TPS) that can be processed on a network depends largely on the block size, which limits both transaction speed and data transfer capacity for each individual node or miner within the system. Generally, larger blocks provide more space for transactions to occur while smaller blocks allow miners to optimize their hardware resources more efficiently with fewer processing burdens. The most common measure of block size today is known as ‘Megabyte’ (MB). This unit measures exactly one million bytes, so if your blockchain has 1 MB blocks then it could theoretically process up to 1 million separate transactions every single second – however this would require considerable computing power from all nodes involved in order to do so reliably without errors occurring due technical limitations such as latency or bandwidth issues etc.. As you increase or decrease your blockchain’s block size accordingly then you are essentially able modify the maximum TPS available on your network according availability/resource constraints faced by participants at any given time period – thus making it suitable for various types of use cases requiring different levels performance capabilities depending upon specific requirements e.g; low-latency payments versus large batch transfers etc..
Throughput Rate
The other major factor influencing capacity in cryptocurrencies relates directly to user experience rather than pure technological specifications – i.e; throughput rate which determines how quickly new information regarding pending/completed transactions propagates throughout entire global peer-to-peer digital ledger using consensus protocols such as PoW (Proof Of Work) & PoS (Proof Of Stake). So although certain systems may have perfectly optimized protocol rules allowing them reach high theoretical maxima when measuring purely transactional timescales – actual average speeds experienced users day-day basis often end being much lower since many external variables beyond control affect speed propagation signals across network over long distances between mining pools around world . Therefore , unless designed specifically mind ensure fast confirmation rates regardless geographical location particular participants located at , otherwise final values reported during verification phase could take noticeably longer verify compared those situated closer main broadcast hubs responsible disseminating updates globally .
