I've grown to love the term “Ethereum Virtual Machine” as it really captures the essence of blockchain technology.
Now, when I say it captures the essence of blockchain technology, I mean that blockchain is essentially a “big” word for a technology one can describe as a big virtual machine.
You'd quickly realize that this isn't exactly how people view the blockchain. The blockchain is simply a channel to which various tasks can be carried out or several applications can be run, but more often than not, you'd see people call the blockchain a “distributed ledger”.
Of a surety, blockchain is a financial database amongst other things, that is, in fact, distributed and intended to be “decentralized” but it is not merely a ledger as that forces the technology into a corner of just being a network for financial records.
What is a ledger?
A ledger is a record-keeping system used to track financial transactions. It includes details like debits, credits, and balances, providing a comprehensive overview of a company's or individual's financial activities. Ledgers can be maintained manually or digitally.
ChatGPT.
You know what's funny about this definition? It really proves that blockchain doesn't qualify as a ledger.
How?
There's absolutely nothing “comprehensive” about blockchain data. Fact remains that each advancement in the space tends to move in the direction that makes data passed onto this network even less comprehensible.
First, you cannot understand the purpose of any user-initiated blockchain transaction as it's really just assets moving from one address to the other. These addresses do not carry public records to identify who's moving what, neither do the transactions carry variable “memos” to understand their purpose.
Now why the word “verifiable memos”?
Well, anyone can certainly write any memo when moving crypto assets around, it doesn't, in its raw form, mean anything until it is tied to a tangible source that can validate the memo as true.
That said, the one thing that exists within blockchain that forces people to believe that it is a ledger(that is: a comprehensive record of financial transactions) is really the “chain of transactions”.
In blockchains like Bitcoin, there's a unique identifier of these chains of transactions and that's called the merkle tree. Now that's an entirely whole different world as though if we were to actually dive into it, we'd find that the merkle tree simply adds another layer of complexity to blockchain transactions making them not “comprehensive”.
That said, the fact that blockchain is, as a name implies, a chain of transactions, doesn't mean it's a ledger. Fact is, the word “transaction” is synonymous with “Operations”, hence its wide usage over operations.
The real essence of blockchain is to be a finality layer for various “operations”.
But why are we even talking about this?
The Debate On Transactions Per Second(TPS) As A Valid Scalability Metric For Blockchains
Ledgers are primarily associated with finances, not a wide array of operations. The fact that blockchain has been largely expressed, even by its developers as a ledger has made metrics like “Transaction Per Second(TPS)” become a marketing ploy for new chain builders to deceive and lure in investors over theoretical numbers termed as a scalability metric.
The problem with this assessment is that blockchain transactions(operations) vary across the board but are all being counted or defined by this system of scalability assessment as the same.
Think about it for a second, smart contracts transactions(operations) differ from user-generated operations - even the fees reflect this but it's all counted the same when clearly one takes more compute resources - if that is the correct way to put in.
It was in fact an interesting discovery to find that with “account abstraction” simple operations like token swaps which generally require two separate transactions will now be batched together and stats like TPS will see only one user operation where there should be two.
See where we're going with this?
“Solana actually is probably at least five times faster now than it was when I joined. But you don’t see it because […] the complexity of the transactions has massively increased.”
A simple transaction such as a consensus vote or sending SOL to another user has a low compute cost, while an arbitrage transaction or minting an NFT could be “100 times more compute-intensive.” Both would be counted as the same under TPS, explained Federa.
This is not Solana ad frens :)
Most crypto gees hate this chain’s TPS reports but I actually see reasons to why people are wrong here and Federa says it all:
Federa argues the criticisms are unwarranted. “Votes are real transactions on Solana that pay their way,” he says.
“Some people are like, ‘I don’t want to count votes; votes aren’t counted in other networks.’ Okay, I will accept your premise. Let’s look at the real TPS number, then.”
Staking tool provider Solana Compass currently lists a “true TPS” — which excludes consensus vote transactions — of 704 for the network.
“The true TPS number that Solana Compass reports is entirely designed to dispel it, and that number is still 10x what the nearest blockchain is able to do,” said Federa.
I am of the opinion here that if it is a valid “on-chain operation” then it is a transaction to be counted on as it should, by this, use up resources which literally adds loads to the chain.
The ability of a network to take on the loads and function as usual is literally the definition of being scalable.
That said, TPS remains a flawed way to measure “scalability” as that's like counting 10,000 promissory notes as simply “10,000” in value even when some of these notes are debt instruments of 20 or 100 in market value.
The first thing that needs to be understood is that blockchain is a virtual machine for the facilitation to finality of various kinds of operations, not a simple financial ledger. This tech facilitates operations that are not fungible in value, thus, the TPS is a flawed metric for the “scalability” of any blockchain.