How Long Does a Crypto Transaction Take
I don't know what you've heard about crypto investing, but as a brand-new crypto investor, I'm learning a lot every day about how crypto transactions really work.
One of the parts of crypto investing that seemed most mysterious and frightening to me before I started is the constant recommendations to make sure that you copy and send the correct address for each deal that you make.
In fact, it is fascinating to me that each coin has its own series of addresses: if you send Etherium (ETH) to a Bitcoin (BTC) address, it will not work!
Not to mention that if you copy (and paste) an address incorrectly, your crypto could be lost forever in the depths of the internet with no way to get it back.
So, security tip #1 for today: Make sure you copy the appropriate deposit address and check very carefully, after you paste it into the box, that the address matches what you copied!
However it's not enough to copy and paste the correct address into the proper area on your transfer form.
Then you have to wait.
And here is where I wind up stressing a little (or a lot) every time!
Each network has to confirm that your transaction is processed before your crypto will show up in the end account. On the Bitcoin network, the typical confirmation time for a BTC payment is about 10 minutes, but transaction times can vary wildly-- and here is what I've learned about why that is.
How Long Does It Take To Send a Bitcoin?
Blockchain. It's the future of cash as we know it. But although money sent through old-fashioned banks usually hits accounts pretty quickly, a Bitcoin or crypto transaction can take a * little bit * longer.
On the Bitcoin network, as I said before, the average verification time for a BTC payment is about 10 minutes. However, transaction times can vary a lot because of aspects such as the total network activity, hashrate and transaction fees. If the Bitcoin network is clogged up, there will be a backlog of deals in the mempool.
Sometimes users paying more in transaction fees can get deals to go through faster. This happened in April 2021, when Bitcoin transaction fees were averaging $59.
What Exactly Is a Bitcoin Mempool?
A mempool is where Bitcoin transactions hang out while they wait to be confirmed and added to the official blockchain records. A mempool is temporarily stored on individual nodes in the network. Mempool transaction are cleared out each time a new block is contributed to the blockchain. Pending transactions waiting in mempools can be processed once they fulfill the minimum transaction fee threshhold. This is why transactions with lower fees often take longer to process: they have to "wait" more than one block in the mempool before they are processed and confirmed.
Crypto Verifications: How Many Are Needed?
In fact, all cryptocurrencies have their own versions of the Bitcoin Blockchain and each one is processed at different speed rates for different fees. Many newer coins can process transactions for fees that are a lot lower, but you end up waiting loner while the confirmations wend their slow way through the network.
As soon as a new transaction is verified and included in a new block, it will count as one confirmation. After some time (varying depending on the cryptocurrency), another block will be developed with the same transaction, counting as its second verification.
Some accounts and exchanges only require one verification, while some require 3 or more verifications.
For Binance, one block confirmation is needed for BTC deposits, while two block confirmations are needed for Bitcoin withdrawals. On Coinbase, three block confirmations are required before a BTC transaction will be considered finalized.
All Of This Takes Time...
A cryptocurrency transaction often goes through a number of confirmations on the blockchain before it is totally cleared. This is to minimize the risk of a cryptocurrency being spent twice or unconfirmed transactions being reversed. Confirmations happen whenever a new block is developed and finished.
If you're transferring a huge quantity of cryptocurrency to a company, some will require as many as six confirmations. This could take an hour or longer. In fact, I'm learning that it's a good idea to find something else to do while you wait so that you are less likely to panic about your "lost" (not-yet-confirmed) cryptocurrency! Going for a walk or doing a chore or work task can be a great way to help you be more patient.
Checking On Your Transaction
If you want to know what's happening to your cryptocurrency while it's being processed, many of your transactions may include a link to show you where your crypto currently is in the blockchain. There's also some great tools out there which can give you an estimate of the average time it will take to finish a transfer or recommended guidance for your transaction fees, usually listed in the form of satoshis (there are 100,000,000 satoshis in one Bitcoin). Some examples for Bitcoin transactions are Blockchain.com and Statista.
If you choose to send a cryptocurrency transaction with lower costs, it's possible your transaction will wind up languishing in a long list of unconfirmed transactions. However, you should not worry too much, as it will get processed whenever there's a lull on the blockchain (or enough other transactions to include with it) and miners have nothing else to do.
How Else Can You Verify Your Crypto Transaction?
If you are sending a cryptocurrency transaction, you can confirm it has been processed through a blockchain explorer.
For example, if you input your cryptocurrencies transaction hash (see here if you want to know what a hash is) into the CoinMarketCap Blockchain Explorer you can see the status of your transaction and if it is validated.
Speeding Up Transactions
It's my observation that each cryptocurrency has its pros and cons. Some charge you more in fees to be processed (and may process quicker), and others take a long to process abut are much cheaper. It's really up to you, when you are sending crypto transactions, to choose the best tradeoffs for your current goals.
For instance, I have learned a lot recently about the gas fees associated with the Etherium network, so if I want to move Etherium to my savings platform from my trading exchange, I've learned it's actually much cheaper to switch it to a different currency, move it for less (and be patient!), and then switch it back to Etherium. (More about what I've learned and the details of how to move ETH for cheaper in a future post!)
You can also try checking on sites such as Blockchain.com Explorer to see how congested the network is or when transactions seem to be less expensive.
We hope you've enjoyed our musings about how long cryptocurrency transactions take to confirm and be verified. Hopefully, the next time you try to move some cryptocurrency, you won't be as shocked (or scared!) when your transaction takes a little longer to process than you thought it would.