Initially blockchain technology was introduced in 2009 as an alternative to the existing payment infrastructure dominated by state-backed banks and large financial institutions. In the years since, we have seen an tremendous rise in the number of applications that are being based on the blockchain for purposes like deeds, identity, supply chain management and countless others. While many of these projects bring useful building blocks to the distributed ledger space, at the same time the definition of a transaction is sometimes stretched to its very limits or even beyond.

If a chatbox uses a ledger for broadcasting messages decentrally (IOTA), can we still call that a transaction? Or a sell-offer on Ripple that is being cancelled some time later, does that count for one, two or maybe even zero transactions? Per definition, at an transaction ‘something is transacted; especially : an exchange or transfer of goods, services, or funds electronic transactions’. Can information be an transaction in itself, if there is no exchange of value? If you answer this with yes, that means that we can call every email or this text you are reading, a transaction. It might be that would be taking things one step too far since it would render the concept transaction completely meaningless.

I hope you agree with me that the main blockchain applications in the short run at least will be transactions of some kind of value. While huge numbers of test or status messages are interesting from an marketing viewpoint to demonstrate a certain transaction capacity, it can only be partly seen as a proof of real-world adoption. The same goes for coinbase transactions: they are more a kind of base-load on the system, not a proof of the system being used for payments. So you might want to keep this in mind when you compare the transaction rate per second within our weekly update, not all of these transactions are payments! Especially for fee-less chains, it is quite common that the proportion of non-zero value transactions is less than 1%.