Defining a transaction on the Bitcoin blockchain:

Currently, we measure the transactions Bitcoin can handle based on the some of the transactions-IDs in a given block. We the users then naively assume that this transaction-ID can only contain a single output or single complete transaction, which has led to the believe that Bitcoin could only process on Avg. 3-4tps. This assumption is cripplingly misleading information.

First, let's clear up some common miss perceptions. Transaction-ID's are not equal to transactions. However, Transaction-ID's are currently used to calculate t.p.s.

In reality exchanges and wallets have the ability to spend multiple inputs to multiple outputs. This fact enables the Bitcoin network to validate various actual transactions with a single Transaction-ID.

I, for one would propose we rename or rebrand the term,
TranactionID to Transaction-Batch-ID.

Also, the fact that a single transaction-batch-id could have multiple outputs reduces the space used in the confirmation block allowing a higher fee to size ratio, without actually spending more. Compared to sending two transactions, each with their own Transaction-Batch-IDs.

Some members of the Bitcoin community has expressed concern about the size of the UTXO size. The only method that I see regarding reducing the UTXO set is to, simply, spend the dust and allow for a single larger output. This process is also known as Consolidating.

Now that we can agree that the current t.p.s, which are displayed on many websites to be misleading. What can we do about it?

1. Exchanges and wallets could combine all their client's transactions for a given period and create a single larger Transaction-Batch-ID
2. Understand that during peak hours your exchange/wallet would only broadcast your TX after a minute or two, Allowing for better block space allocation and higher-proportional-fees
3. Don't use BTC for small payments /s

OR the miners could raise the block size limit, and we could still do all of the above with the added benefit of lower fees and faster confirmation times.

Extra:

If we had 100 transaction-Batch-ID's how many actual transactions could fit?

What does and a single output and multiple inputs in bitcoin mean?

Does having two outputs, in a single transaction-Batch-ID, equate to 2 transactions?