What is the transaction capacity of Liquid?

Transaction capacity describes the maximum number of transactions achievable by a network in a certain amount of time. While Liquid enables faster transactions than Bitcoin due to a higher block production frequency and two-block transaction finality, its overall transaction capacity is similar to that of the Bitcoin blockchain.

Block Size and Frequency

Liquid blocks have exactly the same maximum block weight as Bitcoin, but are ten times as frequent (on average). 

As Liquid blocks are signed by the Liquid functionaries in a round-robin and not produced through Bitcoin’s proof-of-work, there is very little variability in block intervals. Therefore, the Liquid sidechain usually produces 60 blocks per hour.

Transaction Size

Liquid uses Confidential Transactions, a feature that hides the asset type and transaction amount shown on the Liquid blockchain from third parties. This is great for improving users’ confidentiality, but the extra cryptography required results in transactions that are larger than a regular Bitcoin transaction.

Due to the larger transactions, a Liquid block can include fewer transactions than a Bitcoin block. But because Liquid’s block production frequency is higher than that of Bitcoin, its overall resulting transaction throughput (transactions per second) is greater than on the Bitcoin mainchain.

Comparing Transaction Capacities

As shown in the table below, the transaction sizes on Bitcoin and Liquid can vary quite a bit, but overall, Liquid will be able to support a larger quantity of transactions per hour than Bitcoin. 

In addition to the extra capacity, Liquid’s shorter block intervals allow for faster confirmation times. This makes the network especially suitable for traders who rely on time-sensitive transactions.