Centralized payment nodes use servers to conduct transactions and store data. However, the Bitcoin network is different because it is decentralized. Miners make payments and the blockchain is the database. Every 4 years, the difficulty of mining BTC increases. To maintain the miners, users pay a commission. How long a bitcoin transaction takes depends on various factors.
At first, the Bitcoin network confirmed requests quickly. As the cryptocurrency grew in popularity, BTC had bandwidth difficulties. This increased the time to process payments. The number of users increased. The block size of 1.5 MB was not enough for fast processing of requests, so operations slowed down with high load on the network.
How BTC transfers are carried out
To send funds, you need an address and a private key. In the first case, it is an association of symbols. It is available exclusively to the owner. The address is a kind of safe. Everyone can see what is in it, but it can only be opened with the private key.
If user A sends BTC to address B, the transfer will take place in 3 stages:
- Input. The address used to send money from A is set.
- Quantity. The amount of cryptocurrency that is transferred from A to B.
- Withdrawal. B’s user data.
When the first member of the network creates a payment to address B, a private key is used. The request is then sent to the network where miners verify, process the block and perform calculations. After these steps are completed, the transaction is approved.
How the Bitcoin network works
Bitcoin transaction speed today is not high due to the peculiarities of the blockchain. It is a chain of blocks in which a new record is linked to a past record – and so on until the initial request.
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In a decentralized network, it is impossible to change a payment because it is validated by new nodes (they must meet a number of metrics). Blocks are mined by the community after performing complex computational processing. They create a single chain, and information about it is public.
Approved and suspended transfers
Transactions in a public blockchain need to merge to be approved. A specific node includes 1 evidence.
6 proofs are required to create a request.
This is to prevent the same coins from being reused. If the investor tries to change the condition, the transaction will not be approved.
What is the Bitcoin transaction confirmation rate
It is the number of transfers that a network can process in 1 second (TPS). Blockchains have different rates. Each network in terms of speed has an average and maximum value. Despite the fact that bitcoin is the backbone of the cryptocurrency market, it has a low TPS. On average, the blockchain processes 5 transactions per second (7 TPS maximum). This is due to low throughput due to the block size limit of 1.5 MB.
Various options have been proposed to solve the problem, including increasing the block size. However, investors are reluctant to make adjustments. Therefore, Bitcoin transaction confirmation times do not change. For example, the Visa system is able to process up to 2,000 requests per second. There are also other cryptocurrencies that surpass the main digital coin in terms of throughput. At first, Ethereum’s network speed was 15 TPS. However, after changing the consensus algorithm from Proof-of-Work to Proof-of-Stake, the figure increased to 100 thousand transactions per second.
How to calculate the commission
The user sets the parameter before the transaction. With a higher commission, the transfer is confirmed faster. In cryptocurrency wallets, the fee amount is always set by default. This is optimal for users who have problems calculating the commission on their own. The amount of the transfer does not affect its size, but the “weight” in bytes is taken into account. From this parameter depends on how long it takes to confirm a BTC transaction by time.
The fee in the network is estimated at 7 satoshis per byte for a payment of medium priority. If the transfer size is 200 bytes, you need to pay 1400 satoshi, or 0.00001400 BTC ($0.81 at the current exchange rate).
How long does a bitcoin transaction take?
A transaction is confirmed after it hits 6 blocks. A bitcoin transaction takes up to 60 minutes in terms of time. However, in practice, you need to wait up to 4-5 hours due to network congestion. Also, the throughput depends on other factors.
The amount of payment will not affect the speed of confirmation. It will be processed in any case. Blockchain observers such as Blockchair are used to assess the status of the network.
Number of confirmations in the network
6 confirmations are required to approve a payment. This limits the ability to reuse the same coins in the network. This feature serves as a defense against “Attack 51” and prevents hackers from altering the operation of the blockchain.
What affects BTC transaction time
Initially, the Bitcoin blockchain processed payments quickly. However, the coin’s popularity grew, and so did the network’s workload. There are parameters that affect the processing speed.
| Parameter | Processing |
|---|---|
If an investor does not want to wait, payment acceleration tools should be used. This is important when a transaction “hangs” waiting for confirmation. This happens due to high network load or a low commission set by the user.
How to speed up bitcoin transaction confirmation time
As the number of payments on the blockchain grows, transactions with higher fees are prioritized. If the fee is set at a critically low level, it can “hang” in the mempool for 2-4 weeks. The bitcoin transfer will still go through. However, there are solutions to speed up the transaction.
Replace-By-Fee
This is a function of replacing a payment that is pending. To speed it up, it is recommended to create a new transaction with the same initial data, but set an increased fee. Nodes perceive the payment as old and the transaction moves in the queue.
CPFP
If the payment is not confirmed, the user needs to create a new order. The money received in the previous transaction will be spent. In it, a higher fee is set. Miners take into account that to confirm this order, they need to approve the first one. The presented function is used only in the Bitcoin network.
Double Spend
This is a repeated sending of money from the same wallet. The probability that both transactions will be approved in parallel is zero. The payment that is more favorable to miners will go through first.
Gas pedals
These are services that allow a transaction to be processed faster. They are often backed by mining pools – for example, ViaBTC, which provides a convenient interface. Free and paid options are provided. In the first case, the order is moved through the mempool with the expectation that the miner will process it. In the second version, you need to pay a commission, which allows you to advance the trade request.
Frequently Asked Questions
❓ How do I avoid transaction delays?
You should select the recommended commission in the wallet. To speed up the payment, it makes sense to increase it.
🔗 How can I cancel a request for acceleration?
There is no such possibility. For free services it makes no sense, and paid services will not reimburse the commission.
💎 What is TxID?
A transaction identifier. It allows you to process the details in the blockchain browser.
📌 What is a mempool?
A section where raw requests are stored. This is where a queue is created to validate and write to the blockchain.
🔧 Why does validation take a long time?
The block size is limited. Due to the popularity of cryptocurrency, this has led to a decrease in bandwidth.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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