Bitcoin has been one of the top cryptocurrencies in the market for over a decade. It was launched on January 9th, 2009 by a mysterious entity called Satoshi Nakamoto.
Bitcoin transactions take an average of 10 minutes to be completed. However, the transaction time is dependent on various factors. Bitcoin transactions have to be verified by a process called mining where miners are required to solve complex puzzles.
The difficulty of mining increases with the number of transactions and verifying every one of them can take up quite a lot of time. In late 2017 when the network saw a spike in transactions, some people had to wait for hours or even days before their BTC reached their wallets. Nowadays, 10 minutes is typically the norm.
What is a Bitcoin Transaction?
Bitcoin is a digital currency, meaning that it does not exist physically. There is no Bitcoin that you can hold in your hand or any paper that denotes the value of Bitcoin.
Bitcoin being a virtual currency, has to be verified on a secure public ledger known as a blockchain which contains the history of transactions and signatures.
The Bitcoins you possess contains a history of your bitcoins and a pair of keys – the public and private key. The private key is only known to you, and this helps to transact Bitcoin, whereas the public key can be shared with others to accept Bitcoins.
The public keys provide you with the information of the transaction, and the private keys help you authorize transactions.
A bitcoin transaction message contains three sections:
- Input – The input is the code that shows the history of the Bitcoin in your public key. It shows the source of the coins.
- Amount – The number of Bitcoins that are in the transaction.
- Output – the output is the public key or the address of the transaction.
Once the blockchain receives the transaction message containing these three sections, the miners work to validate/verify the transaction. This is quite a complicated process; the miners need to solve complex mathematical problems to create new signatures and update the transaction history for the new transaction.
What Determines the Transfer Time of Bitcoin?
Bitcoin transfer times can take as little as 10 minutes to hours, days, or even more than a week. This is mainly because miners have to verify the transactions, and the network can lag sometimes.
Transactions are added to blocks that have to be verified and added to the public blockchain. The standard time to mine a block is 10 minutes.
The main two factors that influence the transaction time of Bitcoin are:
- The amount of network activity
- Transaction fees
The Amount of Network Activity
The network activity of Bitcoin depends on the transactions it processes in a day. The higher the number of transactions, the more the network activity. There are a limited number of miners to process the transactions in a 1MB block.
Due to the increasing popularity of Bitcoin, the network can experience a backlog of transactions waiting to be verified. The block sizes are limited, and they are combined into a massive queue known as the bitcoin mempool. The mempool size fluctuates with increasing wait times, transaction priority, and fees.
Assuming that your transaction is the block and mine, you will receive your first confirmation in 10 minutes and the remaining five confirmations in the next 50 minutes, meaning it may take up to 60 minutes to transfer the Bitcoins into your wallet.
Mining is a mundane task and requires power, scale, effort and technology. Hence bitcoin transactions need you to pay transaction fees. These fees help to prioritize your transactions. This means that the more you pay the miners to verify your transaction, the faster it is processed.
The main delay occurs when your transaction fees are low, and the miners pick your block last.
Bitcoin transaction fees are expressed in Satoshis per byte, which is one hundred millionth of a bitcoin per byte size of the transaction. Bitcoin transaction fees aren’t necessary, but they prioritize your transactions to be verified. The fees are set by the users creating the blocks that have to be mined.
Bitcoin, being a decentralized currency, is highly volatile. The transaction fees may rise and fall, and the wait time may still need to stabilize. Developers building on Bitcoin understand that a wait time of 30-60 minutes for a transaction is unacceptable for scaling adoption. This is why they are working on new solutions that will make Bitcoin transactions instantaneous, such as the Lighting Network once enabled wallets will reduce the transaction fees and even shorten the transaction confirmation time.
When is a Transaction Confirmed?
A transaction is confirmed when the miner processes your block that contains your transaction. If your fees are higher, then the miner is more likely to process your transaction quickly. Most exchanges provide a nominal fee to ensure that your transaction is processed within a time limit.
One confirmation is enough for transactions under $1,000. For Zipmex customers, if the network is busy, then a transaction may take up to one hour, however, generally speaking, you can expect around 10 minutes.
6 confirmation is standard for most transactions between $10,000-$1,000,000. Sixty confirmations are suggested for transactions above $1,000,000 for safety and security. You can check your Bitcoin transaction status on Zipmex within the deposit or withdrawal area of your wallet.