Latency Meaning

Sep 10, 2024 | Updated Sep 10, 2024

Latency is the time taken for a transaction to be verified and confirmed after it is submitted to the blockchain network.

What Is Blockchain Latency?

Blockchain latency is the total turnaround between the initiation of a transaction on the blockchain and the time of its confirmation/inclusion in a block. It is one of the key performance indicators of blockchain that measures the delay in transactions.

When a user initiates a transaction, it is sent across nodes of the network for validation. Nodes verify transaction details to achieve consensus (an agreement on the validity of the transaction) and once confirmed, the transaction is included in a block to be added to the network. As blocks are added, the transaction becomes more final, or, say, irreversible.

Blockchain latency can vary depending on factors like network congestion and nodes available. For payment systems that require real-time operations, low blockchain latency is crucial—that is quicker transactions and a smoother user experience.

Another kind of delay in blockchain is network latency. It is the amount of time it takes for data to travel from one node to another within the blockchain network. Blockchains with lower network latency generally have improved processing and achieve consensus faster.

Throughput and Latency

Blockchain performance and use case rely both on throughput and latency. While blockchain latency measures transaction delay, throughput is the capacity of a network to handle multiple transactions.

Throughput indicates the total number of processed transactions per second (TPS) in the blockchain. A higher throughput means more data can be transmitted with every transaction processed per second.

But oftentimes there’s a trade-off between either due to consensus mechanism, congestion, and other factors. A blockchain might have low latency but limited throughput, or higher throughput with longer transaction confirmation times.

For example, the Bitcoin network has a throughput of 7 TPS, and latency is 10 minutes per transaction. Even if there are fewer transactions to be processed on the network, it will still take 10 minutes for transactions to get validated and added to the network.

However, an increase in network congestion can lead to longer confirmation times for users, from minutes to hours with the same throughput of 10 TPS.