Saturday, April 20, 2019

Question about how decentralised exchanges work

Hello all, Please indulge my ignorance about this subject! I am interested in how decentralised exchanges work, particularly, how they can handle so many transactions per second (tps).

It is my understanding that the BTC blockchain can currently handle ~ 7 tps, but decentralised exchanges, such as CryptoBridge, can handle up to 100,000 tps!.

Since BTC is actively traded on CryptoBridge, how could they possibly handle more tps than the BTC blockchain? I realise they generally trade "proxy tokens" with a short block time (on the order of a second or so) , but eventually, doesn't that transaction have to enter the BTC blockchain somehow?

Also, if we had a situation where a decentralised exchange was creating, let's say, 10,000 tps of BTC regularly, wouldn't that also make the size (e.g. in GB) of the BTC blockchain get super big super fast?

Please help me understand what I am missing, and thank you for your help!



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