Community Submission - Author: Caner Taçoğlu

In short, a benchmark is a standard that functions as a point of reference. Within the financial industry, a benchmark is a measurement standard which can be used to gauge the performance of a particular asset or investment portfolio. Among the most common forms of benchmarks are the so-called indexes, which are basically financial instruments used to represent a group of individual market prices or a collection of data points.

Different benchmarks have been created for a variety of asset classes, such as securities, bonds, stocks, and cryptocurrencies. A popular example of a benchmark is the S&P 500 index, which considers the market capitalization of 500 large US companies. These companies are elected by a specialized committee, following a weighting methodology.

In the context of computer science, a benchmark consists of running multiple computer operations and software as a way to measure the relative performance of a particular product or service. Many benchmarking programs are specifically designed to serve this purpose and are commercialized as software that analyze large amounts of data.

Benchmarks are also used in the context of businesses analysis, as a practice that often includes the measurement and comparison of business behavior and performance - either against what would be considered the most efficient or acceptable practice or against other companies that are recognized as highly successful.

In regards to the blockchain industry, there is still a need for benchmarks. Ideally, these would be based on scientific research and could be created as measurement standards for examining a variety of blockchain features, such as the network throughput and scalability, the degree of decentralization, the efficiency of different consensus mechanisms, and also smart contracts performance.

Related terms:IndexSmart Contract
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