What does "scalability" refer to in blockchain networks?

Scalability in blockchain networks fundamentally refers to the capability of the network to efficiently manage an increasing number of transactions as demand grows. It measures how well the network can expand its throughput by either accommodating more transactions per second or handling more data without suffering from significant delays or increased costs.

When a blockchain network is scalable, it can maintain performance levels even as usage increases, ensuring that users experience low latency and that transaction confirmations remain quick. This aspect is particularly essential for applications needing high transaction volumes, such as payment processing systems or platforms that facilitate many cryptocurrency trades.

In contrast, methods of securing data through encryption are related to data integrity and confidentiality but do not directly address the network's performance under load. The total number of nodes connected to the network provides insight into decentralization and redundancy but does not inherently correlate with capacity for transaction handling. Finally, the capacity to integrate with external systems pertains to interoperability and connectivity rather than the efficiency of transaction processing within the network itself. The focus on efficiency and high transaction handling during increased demand clearly defines the essence of scalability in blockchain networks.