DTCC Study Says Blockchain Could Support US Equity Market Peak Volume at 6,300 TPS


DTCC Says Blockchain Could Support Entire US Equity Market Volume

Scalability is likely the biggest concern to head-up a long list of issues that developers and financial leaders have with blockchain technology. Developers have worked for years to try to make Bitcoin better at scaling, with attempts ranging from the creation of the lightning network on top of the regular Bitcoin network to the fork and facilitation of an entirely new system with, for example, greater block sizes and transaction limits.

The problem is also not just limited to the Bitcoin network. The second biggest blockchain network in the crypto space, Ethereum, also employs limited block sizes. Whenever there is a limit to the amount of transactions that can be processed at any given time, scalability becomes an issue. In a world where economic and financial transactions need to be nearly-instantaneous, it is problematic that the slow nature of the Bitcoin network forces users to sometimes wait nearly an hour for their transaction to be processed and recorded.

But according to research published by the Depository Trust and Clearing Corporation (DTCC), distributed ledger technology could be scaled in a way that would successfully support the entire daily trade volumes of the entire equity markets in the United States. The DTCC is a major financial service firm specializing in post-trade advising, and their prediction could mean huge things for the future life of cryptocurrency and distributed ledger technology as a whole.

The Study

Over the course of nineteen weeks, the DTCC worked with Accenture, an international financial services corporation, and R3, a startup company specializing in blockchain software technology, to establish the extent to which distributed ledger might be able to support massive trade volumes while operating at its peak. According to the study, distributed ledger systems were able to reach an insurmountable total of around 6,300 trades every second, which would amount to 115 million trades per day.

The test relied on commercial platforms such as Corda and DA, operating off of a system of 170+ nodes tailored for the study by Accenture. The entire protocol operated on the cloud, according to researchers. It is important to remember, however, that this study only attempted to measure what officials called “basic functionality.” The simple fact that the scaled DLT could theoretically process that many transactions does not mean that it could also do so with the kind of safety, security, and resiliency necessary to do so.

Blockchain’s Silver Lining

If the blockchain and cryptocurrency space is going to eventually go truly public and win the support of huge institutional investors, the scalability problem needs to have a solution. This study helps to establish a baseline understanding that, given perfect conditions, the distributed ledger has, at the very least, the potential to rival the traditional markets in terms of overall market volume per day.

Whether researchers will find a way to scale any one cryptocurrency’s ecosystem in such a way without sacrificing key safety protocols is still questionable. But as the debate rages on, this focused study has given the community something to be excited about.

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