Bitcoin is a fast growing currency with its roots deeper in the Cryptocurrency market than any other coin. There are still a few questions regarding Bitcoin which remains unanswered among crypto enthusiasts and amateur investors. Some of the questions regarding Bitcoin transfer and confirmations time are answered by this article.
What is a Bitcoin transaction?
Putting it in technical terms, Bitcoins are numerous signatures which are secured with cryptography. So along with a Bitcoin comes its history, a pair of keys- public and private key which allows you to use them. The public key can be accessed by the public as per the name.
So everyone knows how much Bitcoins you have. It is so that they can transfer Bitcoins. However, on the other hand, the private key is a known only to you and not the public. It is safely guarded from the hands of the public. Since you have access to the private key, you can control your Bitcoins as you like.
So in simple terms, Bitcoins are summed-up transaction information with public and private keys. While the public keys allow you to possess the information, the Private keys give you the authority to send that value to another public key.
So how does a Bitcoin transaction really work?
You will use your private key if you want to send Bitcoins to someone. This is so as to send a message to the public Blockchain publicizing this transaction. This entire transaction message contains three parts:
- The Input: It is the source transaction of the Bitcoins you’re sending to someone. This code clarifies the history of how the Bitcoins came to your public key.
- The Amount: The amount is simply the number of Bitcoins that you wish to send to someone.
- The Output: the output is simply the public key or the address of the person that you want to send the Bitcoins to.
The input, amount, and message are sent to the Blockchain. After this transaction message is received by Blockchain, data-crunchers which are known as “miners” work to verify the transaction. Miners solve a round of very complex mathematical algorithm to create new signatures.
It means that they create an updated transaction history for the transacted Bitcoin. The miners will verify the amount you want to send, and then update the list of previous transactions to note that you are sending the specific amount into someone’s public address i.e. output.
How long does it take to Bitcoin Transfer?
After the transaction message is sent, it does not reach another person so promptly. There are known to be many delays in Bitcoin transactions ranging from a few minutes to a few days.
The main reason for the delays is that the Bitcoin platform requires miners to verify those transactions. All of the transactions are piled to form blocks which need to be verified and injected into the public Blockchain. As per the standard Bitcoin protocol, it generally takes around ten minutes to mine one block.
Since Bitcoin is highly popular in the present day, its network faces occasional backlogs with transactions waiting to be formed into a block.
The block sizes are limited so those not falling into one block will be queued into Bitcoin Mempool which contains a lump of transactions waiting to become a block. The size of the Mempool fluctuates depending on the transaction priority fees and the wait times.
How long does Bitcoin take to transfer and confirm?
To better understand the time length of the transaction and confirmation of Bitcoin, it is vital to understand the factors determining it.
The two factors influencing the transaction time are:
- The amount of network activity
It is very obvious that the more transactions that the network needs to process, the longer each transaction takes.
This is because there are only a few finite numbers of miners to process each block. There are only a limited number of transactions that can be included in a block.
- Transaction fees
A lot of effort and technology is required in mining Bitcoin, so the miners take a lot of transaction fee for mining. The transaction fee acts as a deal breaker or maker in the prioritization of the transaction.
So the higher you pay the miners, the quicker your transaction will be verified. In more technical terms, Bitcoin transaction fees are generally expressed in “Satoshis per byte”.
Technically, a Satoshi is a hundred millionth of a Bitcoin, per byte size of the transaction.
Transaction fees are only additional fees and are not mandatory. But if you want to have your transaction processed quickly, then it is best to incentivize the miners with additional fees.
Usually, the user that creates the block of transaction data to be mined set the transaction fee.
The volatile nature of the market determines the transaction fee during the time of the transaction. The transaction fees are thus very unpredictable.
As time will come and the Bitcoin platform will develop and become stronger, the transaction fees may stabilize.
Usually, miners take 10 minutes to mine a valid Bitcoin block apart from the above two determinants. This is generally the time taken for your transaction to be prioritized and included in the block. If not, then your transactions remain unconfirmed in the Bitcoin Mempool.
Time to confirm a Bitcoin transaction
Generally, a Bitcoin transaction needs 6 confirmations from miners before it’s processed. As mentioned earlier, it usually takes 10 minutes for a miner to mine a block.
This is the time when you can expect your transactions to be prioritized. So in average your transaction can take around an hour to complete.
However, due to the huge prominence of Bitcoins in the Cryptocurrency arena, there have been many delays in the recent years. As noted, there have been delays from 30 minutes to over 16 hours in the worst cases.
There have been divided opinions of people on relieving the scaling issues. Some say the solution is making a larger block size capable of holding more transactions per block while others prefer Segregated Witness (SegWit) and Lightning Network to improve the speed of the transaction without the need to increase the block size.
If and when your transaction is included in the block and mined, the first confirmation will take place in 10 minutes while the remaining five confirmations will take place in the next 50 minutes.
So in totality, it will take a minimum of 60 minutes to transfer Bitcoins to a wallet. Here we also have to assume that your transaction is included in the very next block every time. In many cases, people have had to wait more than a week for the transaction to be complete.
Your transaction may be completed promptly if you are willing to provide transaction fees to the miners and or the network load is less.
The confirmation time during these cases takes less than 60 minutes. You may also use SegWit enabled wallets for prompt confirmation without having to pay substantial additional fees.
About Bitcoin Confirmations and more
A new block is created in roughly ten mines and added to the Blockchain. The new transactions are set into blocks to be verified and recorded. These transactions are then eventually verified by the Bitcoin network. One must know the following things regarding Bitcoin confirmation:
How many Bitcoin Confirmations is needed?
After the transactions are sent for confirmation, the miners verify the validity of the transaction and group it into blocks.
This block is placed on top of the Blockchain after being confirmed. However, the more confirmation that a transaction gets, the more secure it is.
So miners build next block on top of the previous block, and each time a new block is built, the older blocks get confirmed.
This makes it harder for anyone to manipulate the system and remove the block with your transaction from the Blockchain as it is buried under many confirmed blocks.
Generally, it is suggested that you wait for at least 6 confirmations so that you can be sure to the maximum that your transaction will not be canceled. However, you can also follow the below advice in regards to Bitcoin confirmations:
- Do not opt for 0 confirmations since it can be reversed.
- For Bitcoin payments less than $ 1000, you can only wait for one confirmation.
- Wait for at least three confirmations for the payments between $1000 to $10000.
- Wait for six confirmations for an amount between $10,000 to $1,000,000, since you need high security.
- Only after 100 confirmations, you can use freshly minted Bitcoins.
- Also, until having 120 confirmations, Older Bitcoin clients will not use newly earned coins.
Checking Bitcoin Confirmations
Your wallet will give you the option to view the transaction on the block explorer or give you the transaction ID after you have made the transaction. The transaction ID may look like this: 1KaAFuvppVSkbPZ9hWvt4JytwbiTg56cvT
After the ID is given use it to check the number of transactions. You must paste the ID not a block explorer like Blockchain.info. After pressing enter you will see more details about your transaction.
Average Bitcoin Confirmation Time
If you pay large additional fees, your transaction will most likely be confirmed within 10 minutes. The recent day in July 2018, the average confirmation time has been noted to be from 10 to 14 minutes.
What if the Bitcoin Transaction remains Unconfirmed for Hours?
It is best advised that you wait if your transaction is unconfirmed for hours. You can resend the transaction if the transaction confirmation time has crossed more than 72 hours.
You can avoid this from happening, iby using Electrum wallet. The Electrum wallet lets you raise the fee on transactions if they get stuck.
How Many Confirmations Does Coinbase Need?
While many companies may require only one confirmation, Coinbase requires three confirmations before a transaction will show up and be spendable in your Coinbase account. 3 confirmations are required for safety and so that the transaction cannot be reversed.