Many in the crypto space tout TPS on their projects. What exactly is TPS and does a higher number matter? TPS stands for "transactions per second" indicating the volume at which is the network's max capacity.
We're starting to see more and more projects claiming to support tens of thousands of transactions per second. However, it may be more of a marketing ploy then something of substance or reality.
Charles Hoskinson, the co-founder of Ethereum, Bitshares, Ethereum Classic, and Cardano explains this in a Reddit post about Cardano vs EOS.
"TPS is an absolute red herring and anyone who touts it as the core of their system either has no idea what they are talking about or they are being dishonest to manipulate people into contributing to their Lamborghini fund.
What matters is how the protocol scales as new users enter the system. If the system is replicated and homogeneous, then you cannot scale to a world wide system. Period. You need new users to add to the available pool of resources so you never run out.
With Praos and RINA, we have the beginnings of this approach and over time it will only get more pronounced. EOS has yet to provide a working example of how they will achieve this and again as a reminder, none of Dan Larimer's ideas have ever been subjected to any rigorous peer review."
A user replied, claiming TPS "is most important indicator of how fast a value exchange system can work." Hoskinson then explained further,
"It's a red herring because it says nothing of the average transaction size, if tps capacity increases as you gain more user, the network requirements behind such a high tps and how to deal with Blockchain growth. Where the hell is Dan going to store all those transactions? How will they move?
TPS isn't a useful way of looking at the quality or level of decentralisation of a system. You have to examine the protocol in more holistic ways. Second, we've seen ouroboros perform at more than 200 tps in a lab unsharded. It's not hard to inflate these numbers. We are more interested in scaling."