Bitcoin Speed: 7 Transactions Per Second? I read somewhere that Bitcoin can only handle 7 transactions per second. This works out to 604,800 transactions per day. Visa currently processes about 1,700 transactions per second (and can handle vastly higher amounts than this). This means that the Bitcoin system can handle less than 1/200 of Visa's current processing output.

Is this correct? I find it hard to believe that so many people would buy into a system that's so inefficient / unscalable.

Also, if my assumption is correct, suppose there are (on avg) 700 transactions per second during a given 10 min period (i.e, 70 times the max output rate) does this mean we will need to wait 70 * 10 min for all those transactions to be confirmed? If yes, why can't some evil actor overwhelm (i.e, postpone) the system by submitting thousands of tiny transactions to the network?

Thanks in advance
I read somewhere that Bitcoin can only handle 7 transactions per second.


That's roughly correct - only about 7 transactions per second can be confirmed using legacy transactions.  With the recent adoption of segregated witness, it could be closer to 30 transactions per second.


  I find it hard to believe that so many people would buy into a system that's so inefficient / unscalable.


Some people might have confidence that a better solution will eventually be found.  The protocol can be changed with community consensus.  Others might find that it is good enough for what they need in the short term (a particular transaction, day trading, etc) and not care what happens in the long term.


  Also, if my assumption is correct, suppose there are (on avg) 700 transactions per second during a given 10 min period (i.e, 70 times the max output rate) does this mean we will need to wait 70 * 10 min for all those transactions to be confirmed? If yes, why can't some evil actor overwhelm (i.e, postpone) the system by submitting thousands of tiny transactions to the network?


Transactions are not first-come-first-served.  Miners can decide which transactions will be confirmed, and usually this is done by prioritizing them by  highest fee.  So if the attacker doesn't include competitive fees in those transactions, they will simply never get confirmed and there is no issue.  If he does, then the attack is potentially quite expensive for him.  And even in that case, honest users who really need their transactions confirmed can simply offer an even higher fee.