What is blockchain scalability? (Complete guide for beginners)

Blockchain technology provides an alternative to traditional centralized ledger systems by enabling secure and transparent transactions without relying on a single controlling authority. Its security is based on strong encryption and a decentralized network architecture, which prevent data tampering and censorship. 

Despite these advantages, blockchains face significant scalability and performance challenges that limit their ability to handle large transaction volumes efficiently. Limited transaction throughput and slower processing speeds — as compared to conventional Web 2.0 systems — hinder wider adoption of the technology in high-demand applications. 

In recent years, there's been a flurry of research and development to address blockchain scalability issues, particularly via modular architectures that separate the main blockchain layers — settlement, execution and data availability — into distinct components. 

While the best blockchains are still less scalable than the fastest Web 2.0 systems, this gap has been narrowing. The industry's focus is now on achieving scalability comparable to that of Web 2.0 systems, such as Visa's famed high-throughput network, without sacrificing security. 

In this article, we discuss the concept of blockchain scalability, explain its underlying issues and outline the primary techniques to improve it while still maintaining network integrity.

Key Takeaways:

• Blockchain scalability refers to a network’s ability to handle a growing number of transactions without compromising speed, cost, security or decentralization.

• Key approaches to improving scalability include modular architectures, parallelized execution, sharding, Layer 2 rollups and platform-specific implementations, such as Ethereum’s proto-danksharding and Solana’s Firedancer. 

• As of early 2026, modular blockchain designs — particularly those based on externalizing the data availability layer — have become the leading drivers of gains in web3 scalability.

What is blockchain scalability?

Blockchain is a decentralized digital ledger that records transactions securely and transparently without a central authority. When Bitcoin (BTC) was launched in 2009, it marked the arrival of the first viable decentralized network secured by cryptography, enabling peer-to-peer digital currency transfers. While Bitcoin's decentralized model was a revolutionary concept, it quickly became clear that its blockchain could handle only about seven transactions per second (TPS). Thus, it was limited in scalability as compared to traditional enterprise-grade Web 2.0 systems.

In this context, blockchain scalability refers to a network's ability to increase transaction throughput while maintaining speed and security. TPS is a key metric used to measure this capacity, indicating how many transactions can be processed per second at the network level. Higher TPS allows a blockchain to support more users and applications without bottlenecks or excessive costs.

The challenge of achieving scalability on blockchain is tied to what is known as the blockchain trilemma. This concept highlights the historic difficulty of simultaneously optimizing the three core properties of blockchains: decentralization, security and scalability. In traditional monolithic blockchain designs, improving one or two of these parameters often requires trade-offs that reduce the third. For example, increasing TPS by centralizing control can compromise decentralization and security.

Modular blockchains — which separate settlement, execution and data availability layers into distinct components — are often more successful than their monolithic counterparts in addressing the blockchain trilemma.

Recent blockchain development

In 2020, a major breakthrough in blockchain scalability occurred with the launch of Solana (SOL). This Layer 1 network is often cited as the most scalable among popular public blockchains. It claims to support up to 65,000 TPS under ideal conditions. 

In December 2025, Solana integrated its much-anticipated Firedancer validator client software, which has achieved a throughput of over 1 million TPS in test environments. This upgrade is likely to further solidify Solana’s position as the most scalable Layer 1 chain in the blockchain industry. If Firedancer demonstrates even a fraction of the throughput achieved in testing, at least one blockchain will finally be able to claim scalability levels comparable to the fastest Web 2.0 networks. 

Other highly scalable blockchains, such as Sui (SUI) and Monad (MON), have also emerged in recent years. Solana’s Firedancer and these new chains are fast closing the gap with high-performance Web 2.0 environments.

The other major blockchains in the industry have yet to rise to this level of scalability. For comparison, major cloud service providers like Amazon Web Services (AWS) and Google Cloud can process millions of transactions or requests per second by distributing workloads across vast data centers. These numbers make Bitcoin’s 7 TPS — or even Ethereum’s highest-ever recorded TPS of just under 33,000 (achieved on Dec 1, 2025) — look exceedingly modest.

However, the overall performance gap between the blockchain industry and the leading Web 2.0 infrastructures is now closing quickly — thanks to modular designs, Layer 2 networks, the shift toward decentralized processing across thousands of independent nodes, and, particularly, the high hopes pinned on Solana’s recently introduced Firedancer validator client software.

Why is scalability important in blockchains?

Blockchain scalability is vital because slow transaction speeds and limited capacity create bottlenecks that hinder wider adoption of this relatively new technology. The aforementioned recent advances in blockchain scalability have enabled the development of high-performing, industry-grade applications on blockchains, particularly in niches such as decentralized finance (DeFi) and gaming.

DeFi platforms depend upon quick transaction confirmations to execute trades, loans and other financial operations. Slow processing can lead to delays between a user’s request and the actual execution, and can expose users to risks, such as price slippage or failed transactions. Recent improvements in blockchain scalability have helped to address many of these issues that plagued earlier blockchain systems. 

For instance, as of early 2026, Solana and Sui are among the fastest-growing web3 platforms in terms of DeFi adoption. Along with the growing DeFi sector, the blockchain industry is now implementing an increasing number of real-world asset (RWA) tokenization projects. Thanks to improved scalability, the risks of failed transactions and high slippage are no longer major roadblocks to on-chain adoption of DeFi and RWAs. 

Game and business applications

Similar to DeFi, blockchain-based gaming demands fast, seamless interactions to keep players engaged. Games that experience lag or delayed responses tend to lose users quickly, because the experience falls short of the real-time expectations set by traditional gaming platforms. Recent improvements in blockchain scalability have also brought thousands of gaming titles to web3. On-chain games can now handle millions of microtransactions, such as level-ups and skin trades, thanks to modular architectures and parallel execution environments. 

Beyond these consumer-facing applications, recent improvements in blockchain scalability have created on-chain opportunities for the enterprise world. Many businesses require systems capable of handling vast numbers of transactions instantly while maintaining security and transparency. High-performance modern blockchains, particularly private networks, are deeply integrated into the operational models of enterprises in various sectors. For instance, high-demand global applications run by financial industry giants are using blockchain technology for payments, settlements and treasury operations. 

In short, improvements in blockchain scalability are helping unlock the technology’s full potential across finance, gaming, social media, enterprise and numerous other fields.

The evolution of blockchain scalability

Innovations such as Layer 2s, modular designs, parallel processing and more are driving spectacular improvements in blockchain scalability. Several critical constraints that have traditionally hindered the adoption of decentralized networks are now being torn down. 

Primary among these constraints have been Layer 1 throughput capacity, high transaction fees and long confirmation times. 

Base-layer throughput constraints

Early generation blockchains such as Bitcoin, with their monolithic structure and slow validation mechanism, are limited to substandard throughput capacity. Bitcoin’s paltry 7 TPS is often cited as the starkest example of such limitations. Networks like Litecoin (LTC) and Cardano (ADA) don’t fare much better, with maximum TPS capacities of 56 and 250, respectively.

The arrival of Layer 2 rollup networks and sharding architectures has helped to significantly boost the TPS capacity of newer blockchains. Layer 2 rollups shift transaction processing off-chain to more performant environments, and then batch-post the processed transactions to the underlying Layer 1 chain. 

Sharding has also been a useful innovation for boosting blockchain scalability, albeit not to the same extent as Layer 2 chains. Sharding refers to splitting a blockchain into multiple sub-networks, known as shards. Each shard processes transactions separately and in parallel with the other shards on the overall network. Parallelized processing helps achieve a much higher throughput than monolithically designed blockchains can achieve.

High transaction fees

High transaction fees have been a feature of many blockchains. This problem has been particularly evident on Ethereum (ETH), a network regarded as the pioneer of smart contract functionality and decentralized apps (DApps). 

However, Ethereum's Fusaka upgrade in late 2025 has helped decouple gas fees from network activity, leading to a sharp decline in transaction costs on the blockchain. For comparison, Ethereum's typical transaction fee before the upgrade was a few US dollars on average, rising to double-digit amounts during network congestion. After the Fusaka upgrade, the fee has dropped to around $0.10–$0.20.

Besides the upgrade, a couple of technical implementations on the Ethereum blockchain — proto-danksharding (EIP-4844) and PeerDAS (EIP-7594) — have also contributed to this reduction in fees. These innovations enable efficient scaling of Ethereum-linked rollups by posting large amounts of transaction data without overloading Layer 1 validator nodes. 

Some other decentralized networks offer even lower transaction fees. Solana, for instance, has always featured comparatively low fees between less than a cent to $0.02–$0.03. In addition, many Layer 2 networks charge transaction fees that are typically less than a cent, making high-volume or frequent transactions highly affordable for both businesses and individual users.

Long confirmation times

Transaction confirmation times have improved significantly, compared to the days of early blockchains. Solana's Proof of History (PoH) consensus mechanism, an integral part of its validation mechanism alongside proof of stake (PoS), helps minimize confirmation times. 

Sharding has also contributed to improved confirmation times by enabling parallelized transaction processing.

Finally, the use of soft finality is another key tool in the quest to slash the average duration of transaction confirmations. “Soft finality” refers to the nearly instant preliminary confirmation of a transaction on a blockchain, before it achieves irreversible “hard finality” in the network's immutable ledger.

Blockchain scalability solutions: Solving the trilemma

Various blockchain scalability solutions have been proposed and implemented to deliver faster and cheaper transactions, quick finality and high throughput. These solutions typically focus either on architectural modifications to the base Layer 1 chain, or alternatively, using modular designs and Layer 2 networks.

Layer 1 solutions

Layer 1 solutions are protocol-level changes that directly modify a blockchain’s architecture in order to improve throughput and boost performance. These changes affect the way transactions are processed, validated and stored across a network.

Consensus mechanism improvements

Consensus mechanisms determine how nodes in a blockchain agree on the validity of transactions and the ledger’s state. The world’s oldest viable chain, the Bitcoin blockchain, uses a proof of work (PoW) consensus mechanism that provides robust security, but suffers from low throughput and high energy consumption. As the original consensus model implemented in the industry, PoW remains popular and, besides Bitcoin, is used by networks like Bitcoin Cash (BCH), Dogecoin (DOGE), Litecoin and many more. 

A key way to achieve better scalability on Layer 1 has been to shift from PoW to newer, more scalable consensus algorithms. Perhaps the most common among these is PoS, now used by Ethereum and many other smart contract–capable networks. 

PoS reduces the computational burden by allowing validators to process and attest to transaction blocks based on their stake (i.e., token holdings locked on the network). In contrast, PoW requires block validators (typically called miners on PoW-based chains) to solve complex, energy-consuming encryption “puzzles” to add new blocks to the network's ledger. This transition from PoW to PoS has increased the efficiency of newer blockchains, reduced energy consumption and improved overall scalability.

Other performance-focused consensus mechanisms — such as delegated proof of stake (DPoS), used in networks like TRON (TRX), and proof of history (PoH), used by Solana (SOL) — further optimize block production and scalability. These alternatives prioritize higher transaction capacity, making them attractive for applications that require real-time or near–real-time performance.

Proto-danksharding

Sharding is a method of partitioning a blockchain network into smaller, manageable pieces, called shards. Each shard processes its own set of transactions and maintains a subset of the total data, reducing the load on any single node and increasing overall network throughput.

Instead of requiring all nodes to validate every transaction, sharding allows parallel processing across multiple components. This significantly increases the number of transactions that can simultaneously be handled.

While the use of sharding architectures has helped improve blockchain scalability, gains from the standard sharding-based parallel execution on Layer 1s have been relatively modest. 

However, this trend changed radically with the introduction of proto-danksharding on Ethereum in 2024. Proto-danksharding lets Layer 2 chains post large-sized temporary data (called “blobs”) to Ethereum without splitting Layer 1 execution. In contrast, traditional sharding divides a Layer 1 itself into parallel shards, each of which processes transactions independently. 

Proto-danksharding has led to significant scalability improvements by allowing Layer 2s to handle massive transaction throughput off-chain, without requiring the Ethereum network to split or manage multiple shards. 

Innovations such as proto-danksharding (EIP-4844), blobs and PeerDAS (EIP-7594) have taken the scalability of modern Ethereum-linked Layer 2 rollups to entirely new heights. 

Segregated Witness (SegWit)

Segregated Witness, or SegWit, was introduced to address Bitcoin's block size limitations by separating a key piece of metadata, called the signature data, from the core transaction data. By moving signatures out of the main transaction block, more space becomes available for additional transactions, effectively increasing throughput.

SegWit reduces transaction size and helps prevent certain types of transaction interference. This upgrade increases the number of transactions per block, and improves the efficiency of block propagation across the network.

Originally proposed for the Bitcoin network, SegWit was first activated on Litecoin in May 2017, followed by Bitcoin a few months later. The implementation of SegWit paved the way for innovations in Bitcoin’s ecosystem, such as the Lightning Network Layer 2 platform and the Ordinals protocol, which ushered in the era of Bitcoin-based NFTs.

Parallel transaction execution

Earlier, in our discussion of traditional sharding, we touched upon the concept of parallel execution. Ethereum’s original implementation of parallel processing relied on the concept of sharding. However, some newer blockchains have implemented parallel transaction processing directly on their Layer 1s without the need to split their base platforms into shards.

Examples of such chains are Sei (SEI), launched in August 2023, and Monad, whose Mainnet went live in November 2025.

Layer 2s and modular solutions

Earlier attempts to address low Layer 1 throughput focused on scalable, cost-efficient Layer 2 networks and sidechains. More recently, modular blockchain designs have become the preferred solution to scalability challenges. 

Sidechains

A sidechain is an independent blockchain that runs parallel to a main Layer 1 chain. It’s connected via two-way bridges or anchors. Assets can move between the main blockchain network and the sidechain, thereby allowing transactions and smart contracts to be executed on the latter.

Sidechains enable experimentation with different consensus models, block sizes or application-specific logic without affecting the stability of the main chain. They can process transactions more quickly and at a lower cost, then commit final results to the primary blockchain. Sidechains can often enable even greater scalability than rollups.

One limitation of sidechains is that, unlike Layer 2 rollups, they don’t inherit the full security guarantees of the main chain. Security depends upon the sidechain’s own validator set or consensus model, which introduces a separate trust layer. For this reason, sidechains can be a suitable solution for low-risk, high-throughput applications such as web3 games.

Rollups

Rollups bundle — or "roll up" — multiple transactions into a single batch that is then posted to the main blockchain. Computation and storage are handled off-chain, while only summary data and proofs are recorded on-chain. This dramatically reduces the load on the base layer while preserving the security of the main network.

There are two main types of rollups in use: optimistic rollups and zero-knowledge (ZK) rollups. Optimistic rollups assume that transactions posted to the underlying blockchain are valid by default, and they rely on fraud proofs raised by Layer 1 validators to catch any invalid activity. Meanwhile, ZK rollups use cryptographic proofs to validate all transactions in a batch, offering faster transaction settlement than optimistic rollups but with greater technical complexity.

Rollups have already been deployed on Ethereum with considerable effect, enabling faster, cheaper transactions for users while relieving congestion on the underlying network. They represent one of the most promising directions for scaling without sacrificing decentralization and security.

Data availability (DA)

The most recent approaches to solving blockchain scalability issues have focused on modular designs, in which some of the blockchain's key layers — settlement, execution and data availability (DA) — are handled by separate modules, each optimized for best performance for its layer. One popular approach is to retain settlement and execution on Layer 1 but externalize the DA layer. This layer stores all the data validators need to check and verify transactions.

With the Fusaka upgrade and the launch of proto-danksharding on Ethereum, the Ethereum network has moved to using blobs, large temporary data pieces posted by rollups, thus separating the DA layer from the execution layer.

There’s also been a rise in specialized DA chains, which offer other platforms the ability to outsource their DA operations. Examples of such chains are Celestia (TIA) and Avail (AVAIL). 

Connectivity layer: Interoperability and chain abstraction

Improved interoperability between networks has also helped address scalability issues by turning the fragmented world of blockchains into a unified environment where speed, cost and capacity advantages can be shared more easily. 

Technologies like chain abstraction have greatly expanded the choice of compatible Layer 2s for base blockchains. Thanks to platforms like Polygon’s AggLayer and Optimism’s Superchain, which leverage chain abstraction heavily and cultivate multi-chain universes, Layer 1 networks can now access more rollups to integrate. 

Additionally, platforms like LayerZero (ZRO) and Wormhole (W) enable unified liquidity, helping Layer 1 chains access more assets and cross-chain opportunities.

Closing thoughts

While early blockchain networks like Bitcoin and Litecoin laid the foundation for decentralized systems, their limited capacity prompted efforts to improve throughput, reduce fees and enable mass adoption. Solana’s arrival onstage (with its Firedancer upgrade), Ethereum’s implementation of proto-danksharding, the rise of parallelized processing, Layer 2 platforms and modular architectures have all contributed to the vastly improved scalability web3 platforms enjoy today. As of early 2026, modular blockchain architecture, in particular, has emerged as one of the leading drivers of these improvements.

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