Many people think that a cryptocurrency transaction does not take much time to complete. After all, given that we are dealing with digital tech, you might be under the impression that it takes microseconds to successfully complete Bitcoin (BTC) transactions, or do you?
Have you ever witnessed Bitcoin transactions stuck on the way? The one that made you wait for some time before your precious Bitcoin arrives into your wallet? Maybe you are wondering why it would often take around ten minutes before receiving your Bitcoin?
Undeniably, every cryptocurrency investor or trader has been there. Though, how many have tried to figure out the solution to this growing problem? In this guide, you will get to know how long it takes for a Bitcoin transaction to land into your wallet and the reason(s) for such delays.
The truth of the matter is that the time it takes to transfer bitcoins from one wallet to another varies between transactions. Whenever you make a Bitcoin transaction, the network must give approval before the transaction can be actually completed. Besides, the Bitcoin community sets it as a standard that a transfer requires six confirmations before you can consider it completed.
What Factors Affect the Transaction Time of Bitcoin?
There are mainly two factors that affect the transaction time of Bitcoin. They are:
1. The transaction fees attached to that transaction
Miners prioritize transactions by the fees they receive for confirming them. So, if you pay a higher transaction fee, the miner will process yours faster. As a result, your transaction time (delay) will decrease. But, this delay can be indefinite as there is a chance that your transaction will be instantly chosen as last if your transaction fee is negligible. Most of the delays happen as a result of this factor.
2. The load on Bitcoin’s network
The load on the Bitcoin network refers to the number of transactions that the network can process per day. By implication, the higher the number of transactions the Bitcoin network needs to process, the more time it requires to process each one of them. This is due to the fact that a number of miners, or hash power, that can process each block is limited. More so, the number of transactions that can be included in a block is limited as well.
Bitcoin Transaction: How Long Does it Take to Confirm?
It takes about an hour on average to complete a transaction, as the average time it takes to mine a valid Bitcoin block is ten minutes. However, the rise in the use of Bitcoin and its subsequent boom in popularity has caused congestion on the Bitcoin network.
For instance, if your transaction is added in the block and immediately mined, you will receive the first confirmation within 10 minutes and the remaining five confirmations in 50 minutes. So, it will take an hour to transfer Bitcoin to a wallet if the request is already included in the next block. In some cases, the transaction can take even longer than that to complete.
Miners usually key in transactions into blocks so that they verify these blocks and include them in the public blockchain. Block sizes are limited and those transactions that do not make it into any block size are usually taken to a large queue – the Bitcoin mempool.
In essence, the average time it takes to complete one confirmation is between half an hour and sixteen hours or more.
How to Address the Scaling Issue
Some people believe that the solution lies with obtaining a larger block size that can hold more transactions for each block. Still, other members of the Bitcoin community believe that solutions such as Segwit, Schnorr signatures, and Lightning Networks will boost the network and make Bitcoin transactions to complete almost immediately.
Whatever the ideal solution is the most viable, only the future will tell!
How Does a Bitcoin Transaction Work?
Suppose you want to transfer ten bitcoins (10 BTC) to a friend, you will need to use your private key to do so. Your private key sends a message to the public blockchain which in turn announces this request. This transaction message contains the following three major components:
Input – This is the origin or source of the transaction of the Bitcoin you want to send to a friend. It tracks the history of how the Bitcoin arrived in your public key.
Amount – Amount is the number of Bitcoin you want to send to your friend.
Output – This is the address to which you want to send the Bitcoin. It is also the public key of the friend you want to send 10 BTC
This three-component transaction message is directly sent to the blockchain. Then, miners work to verify this transaction. How? They will verify you have the 10 BTC you are sending to your friend. The miners will update the Bitcoin’s list of previous transactions. Finally, they will take note that you are sending 10 BTC to your friend’s public address.
Bitcoin Transaction Fees
You need significant effort, technology, and energy to mine Bitcoin. Little wonder, Bitcoin transactions are subject to increasing fees. These fees help to prioritize the queue. Therefore, the higher you are willing to pay for the verification of your transaction, the faster the miners are likely to process it.
These transaction fees are usually expressed in satoshis per byte. A satoshi is over 200 bytes. So, 200 satoshis per byte accounts to 0.000002 BTC or 0.01 USD per byte. Therefore, if you are sending 10 BTC to a friend, the transaction will likely take about 10 to 30 minutes to get verified. This will occur if it is placed in the Bitcoin queue of the next 1 – 3 blocks.
Miners confirm your transaction when it is permanently included in the Bitcoin blockchain. The time it takes for this confirmation to happen varies. Sometimes, it may take ten minutes and sometimes it may take more than four hours. But on the average, it will take about one hour to accomplish. However, time will tell if the blockchain network will be up to par with the increased use of the predominant cryptocurrency.
This article should not be taken as, and is not intended to provide, investment advice. Users are ultimately responsible for the investment decisions he/she/it makes based on this information. It is your responsibility to review, analyze and verify any content/information before relying on them. Trading is a highly risky activity. Do consult your financial adviser before making any decision. Please conduct your thorough research before investing in any cryptocurrency and read our full disclaimer.
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