Being the first-ever successful blockchain-based cryptocurrency, Bitcoin sure made a dent in the minds of people. Every day thousands of people at least try to understand the mechanism of Bitcoin even if they don’t want to be a part of this. Hey, nobody wants to sound outdated in their 20s, right?
How long does a bitcoin transaction take? It is one of the most common questions that everyone asks at the initial stage. The short answer is this. A bitcoin transaction can take place immediately, and it can even take a day.
However, if you want the long, explained answer, follow us as we explain the process bit by bit.
Understanding Bitcoin Transactions
Suppose you have five Bitcoins. Now you want to send these Bitcoins to one of your friends. The first step would be to confirm the transaction from your side. That is, you have to send the coins. The coins will now be deposited in a public space in blocks, commonly known as the blockchain.
Now you might ask, why would such a valuable asset be stored in a public space?
You see, the Bitcoins you have sent are protected with a key. Usually, this key comprises a long string of letters, so people are given a QR code. And the QR code of the coins you send will only be held by the receiver.
Now, once the Bitcoins reach the blockchain, the transaction needs to be scrutinized. The people who’re assigned to do this job are known as miners or nodes. The checking process is very complex, so we won’t delve into it. Your transaction is good to go when it has around six confirmations.
More is Not Less
Suppose your transaction takes more time to be confirmed. That’s good. How so?
When you send Bitcoins to the Blockchain, it’s added to a string of other transactions, and together they form a block. A new block is added to the Blockchain every few minutes. And the more time your block is on the space, the more confirmation it will get. Which means, more nodes or miners will scrutinize it.
Usually, three to six confirmations are considered to be safe. However, if the transaction deals with over a million dollars, it’s better to get around sixty confirmations.
Once you have three to six confirmations, the receiver can finally gain access to the Bitcoin using the QR code.
Parts of a Transaction
Experts divide a Bitcoin transaction into three parts. They are:
The input consists of strings of information that refer to how you got hold of the Bitcoin in the first place.
It’s very self-explanatory. It denotes the number of Bitcoins you are sending out to your friends.
The output refers to the key the receiver holds. It also means the address you’re sending the coins to.
How Long Does a Bitcoin Transaction Take Between Wallets?
Usually, a bitcoin transaction receives a confirmation every ten minutes. Which means you’ll get six confirmations in an hour approximately. However, the case isn’t the same nowadays.
With the increasing number of transactions, the time taken for confirmation is increasing as well. Nowadays, a Bitcoin transaction can take place in a time between sixteen minutes to an entire day!
However, there are some ways to speed up the transaction. But to know about that, we must understand what transaction fees are.
Bitcoin mining is an arduous process, and at the same time, it requires high-end gears. So, it comes as no surprise that the process requires some fees. These payments are measured in “satoshis per byte.” Is this fee mandatory? No. But there’s a catch.
How much fee you’re willing to pay is completely up to you. However, the more transaction fee you pay, the faster you’ll get a confirmation.
Miners and nodes go through a rigorous process, solve complex equations to verify thousands of transactions each day. And it’s only natural for them to pick the transaction with the highest fee from the transaction pool. As miners target transactions with the highest fees, the ones with lower transaction fees take significantly more time.
Why 10 Minutes?
The creator of Bitcoin, Satoshi Nakamoto, fixed the time of block time to ten minutes. It’s only natural for you to question why this time frame was chosen. Let’s try to understand this step logically.
Let’s suppose; some blocks are made available for multiple nodes. If the time is too long before a new set of blocks comes in, there’s a great possibility that most of the miners will work on multiple blocks. And when more than seventy percent of miners’ work on multiple blocks, it’s logical to assume that multiple miners will analyze one block.
However, the Blockchain program accepts only one, so only one among the miners will be selected, and the other’s ones will be discarded. When the timer is lower, a lot of blocks may remain untouched.
So, after experiments and further research, it was confirmed that ten minutes is the optimum time frame for miners, as it leaves no transaction untouched, and leaves us with a waste rate of only ten percent.
Transaction Taking Too Long?
We must understand that the entire Bitcoin transaction stands on the peer-to-peer system. Which means, real people, and not some computer sitting in a distant server, is responsible for the confirmation. And it is a human impulse to go for greater benefit.
That’s why, if your transaction has a low cost, it may be left on the transaction pool for a significant amount of time. However, you can do “Replace by Fee,” where your transaction will take the place of a transaction with a higher fee, only if it’s taking too long.
Bitcoin is a great system, but sometimes the delay can get on your nerves. You can avoid this inconvenience altogether either by paying an extra fee or by conducting when the network isn’t congested.