How Long Does It Take Bitcoin To Send
How does Bitcoin work? From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users. Behind the scenes, the Bitcoin network is sharing a public ledger called the 'block chain'. Currently, the average bitcoin transaction takes 116 minutes, give or take a few.
The digital currency bitcoin allows users around the world to make low-cost, peer-to-peer payments with a faster processing time than international bank transfers. How fast? Currently, the average bitcoin transaction takes 116 minutes, give or take a few. Here’s why.
Confirming Bitcoin Transactions
When you make a payment using bitcoin, your transaction needs to be confirmed by the bitcoin network, so the payment can be completed. First, your transaction goes into the “unconfirmed transactions pool,” a list of all the pending bitcoin transactions. From there, it is picked up by participants in the peer-to-peer bitcoin network who then use their computing power to validate your transaction.
For a bitcoin transaction to be fully validated and processed, it requires six confirmations. These transaction confirmations are then condensed into “blocks,” or chunks of code, which are added to the blockchain. (Think of it like a ledger in a checkbook.) Each new block is made up of recently processed bitcoin transactions. This is where the term blockchain comes from, as it is effectively a chain of blocks filled with validated and confirmed bitcoin transactions.
All past and current transactions can be viewed publicly on the blockchain explorer on blockchain.info.
Average Bitcoin Transaction Times and Fees
The bitcoin network has grown substantially over the last two years. Bitcoin’s value (measured by its market capitalization) has increased from $3.5 billion to over $45 billion, while its average daily transaction volume has increased from $12 million to over $2 billion from June 2015 to the time of this writing.
This steep growth in daily bitcoin transactions has led to scalability issues for the bitcoin blockchain. Participants in the bitcoin network are struggling to keep up with the confirmations of the high number of bitcoin transactions. This has produced two outcomes. Firstly, bitcoin transactions take longer now than they used to and, secondly, bitcoin transaction fees have increased.
When bitcoin arose as a viable digital peer-to-peer payment system in 2010, the average time for a bitcoin transaction was around 10 minutes while the average transaction fee was only a few cents. Today, due to the increased activity on the blockchain, the average confirmation time has shot up to 116 minutes, according to the most recent data from blockchain.info. The average transaction fee for a transaction to be processed within 30 minutes is around $2.00, according to 21.co. These figures, however, fluctuate depending on how busy the bitcoin network is at any given time.
Bitcoin Transaction Times Vary According to Network Activity and Transaction Fees
Ideally, you want your bitcoin transaction to be completed within 30 minutes, especially if you are sending money to an exchange to use your bitcoin to purchase other digital currencies.
For that reason, it is important to choose a bitcoin wallet that allows you to adjust the fee you want to put on the transaction or one that dynamically sets the fee for you to ensure your transaction is confirmed and processed within 30 minutes or less.
The higher the fee you include with your transaction, the more likely it will be prioritized by bitcoin network participants, and the sooner it will be processed.
The fee alone, however, is not the only factor that will affect your bitcoin transaction time. If the bitcoin network is particularly busy (for example, due to a rally in price which has led to a lot of bitcoin buying), then your transaction can take substantially longer to process. During times of high activity on the blockchain, transactions can take up to several hours until they are completed.
If you set a reasonable fee and the network is not too active, you will most likely look at one to two hours for your bitcoin transaction to be completed. If you are using bitcoin to send money overseas, then that timeframe is absolutely fine and still much faster than a bank transfer. If you are sending money to an exchange to trade, however, you need to take that duration into consideration.
For more bitcoin investing advice, subscribe to Bitcoin Market Journal today.
Learn about bitcoin fees...
Bitcoin is made up of blocks. Blocks are a set of transactions, and currently restricted to be less than or equal to 1,000,000 bytes and designed so that on average only 1 block per ~10 minutes can be created. The groups the create blocks are known as bitcoin miners. These miners can pick which ever transactions they want in the block they create.
Bitcoin miners get paid all the transaction fees in the block they mine. So as such, it is in their interests to maximize the amount of money they make when they create a block. So what they do is pick the 1,000,000 bytes of transactions that results them getting paid the most money.
From a bitcoin miner perspective, they don't care of the value of a transaction, but just the size (amount of bytes), because they are only allowed to create blocks of 1,000,000 bytes or less. So miners don't consider the absolute fee a transaction has, but rather, the fee per byte.
Why are the fee estimations so high?
Eye-balling it, sometimes it looks like the fee estimates are super high. The reason for that is because they use 95% confidence. If a block was found now maybe you'd only need 20 satoshi/byte, but it might be an hour before the next block and in the subsequent time a large amount of new transactions come in.
Sometimes you don't need such high confidence (e.g. it's not important, or you have a way of fee bumping), so you can get away with much lower fees.
Why are Bitcoin fees so high?
Sometimes fees are high when there is a lot of demand for blockspace. Remember that there can be only so many transactions per block. And there is a sort of auction that occurs to determine who's transactions make it in and who's don't. If there are a lot of people who really need to get into the next block, they will pay for the privilege. Wait for demand to die down and fees will be almost 0.
Why do some low-fee paying transactions appear early in the mempool?
It's because a high-fee paying transaction depends on it, and reprioritizes it. i.e. the only way for the miner to get the money from the 'good' transaction, is include a 'bad' one first. It's known as Child-Pays-For-Parent (CPFP), but note that some old versions of bitcoin core, and bitcoin unlimited don't support it (and leave those transactions for smarter miner software).
Do you have historical data?
Nope. But https://bitcoinfees.github.io/ does
How did you build this?
How Long Does It Take For Bitcoin To Send To Bovada
The fee estimates are simply generated by calling estimatesmartfee $n on bitcoin core (0.16.0). The chart is generated by dumping the mempool and doing some smart sorting.
A Lowdown on Bitcoin Fees
The Bitcoin website lists fast peer-to-peer transactions, worldwide payments, and low processing fees as the most important features of the cryptocurrency. Not surprisingly, Bitcoin has become extremely popular as a way to send money digitally across the globe as it solves critical problems faced by transactions executed in fiat currencies.
In fact, the number of Bitcoin transactions has been consistently rising this year. The third quarter saw 20 million Bitcoin transactions being executed, up from 17.6 million during the second quarter. What’s more, the number of Bitcoin transactions has increased at the rate of at least 5% month-over-month since February 2018.
This growth can be attributed to the drop in the average transaction fees on the Bitcoin network, which was earlier proving to be a hindrance in the way of the adoption of this cryptocurrency.
A brief history of Bitcoin fees
CNBC reported in December 2017 that users were paying $28 on an average to transact using Bitcoin. There was one Twitter user who claimed that he had to incur $16 worth of fees to send $25 worth of Bitcoin from one address to another, while another journalist had to spend $15 to send $100 worth of Bitcoin from a digital wallet to a hardware wallet. In fact, the average Bitcoin transaction fee had shot up to $55 in the third week of December last year, according to BitInfoCharts
However, the average Bitcoin transaction fee has come down rapidly since then. BitInfoCharts reveals that the average Bitcoin transaction fee had dropped to just $0.50 in the first half of November 2018, which is probably why users are transacting more in Bitcoin to send and receive payments across the globe. But what has caused such a massive drop in the average Bitcoin transaction fees? To find out, we will first have to understand why Bitcoin fees are charged.
The economics behind Bitcoin fees
A Bitcoin transaction has to be added to the Blockchain in order to be successfully completed. However, for a transaction to be added to the Blockchain, it first needs to be validated by miners who solve a complex mathematical problem to verify the transaction. These miners spend a lot of computing power and energy when verifying a block of transactions from the Bitcoin Mempool (short for memory pool), which contains unconfirmed transactions waiting to be added to a block for confirmation.
Now, miners need to be incentivized for the time, effort, and resources that they are putting in to validate the unconfirmed transactions. As a result, they are given a fee of 12.5 BTC to successfully mine a block, but this is just one of the incentives on offer. Miners also earn a transaction fee that’s selected by the sender in a Bitcoin transaction for their effort as they play a critical role in keeping the network secure.
What drives transaction fees?
Each block of transactions on the Blockchain cannot contain more than 1 megabyte of information, so miners can only include a limited number of transactions in each block. This is why miners prioritize those transactions where they have the potential to earn higher transaction fees.
So, if the mempool is full, users looking to get their transactions through will compete on fees. They will push up the fee in a bid to get their transaction included into the next block that’s set to be mined. So, the Mempool bottleneck plays an important role in determining the transaction fee, though this isn’t the only aspect affecting this metric.
The transaction size also has a role to play in the fee determination. As miners can only include select transactions within the 1 megabyte block, they prefer selecting small transaction sizes because they are easier to confirm. Transactions occupying more space, on the other hand, need more work for validation so they need to carry a higher fee in order to be included in the next block.
So, there are two factors determining transaction fees -- network congestion and transaction size -- and they also play a critical role in the time taken for a transaction to be confirmed. For instance, if a user sends a transaction with very low fees attached to it and the Bitcoin Mempool is full, then miners won’t prefer picking that transaction because of the low incentive involved. In such cases, it could take several hours for the transaction to be confirmed.
However, if a user is willing to pay a higher transaction fee, then the first confirmation could arrive in 10 minutes, which is the time taken to mine a block. The Bitcoin community requires six such confirmations for a transaction to be completely validated. This means that if there’s no network congestion and the fee attached is high, then the transaction should be successfully processed in an hour.
The future of Bitcoin fees
How Long Does Bitcoin Take To Send On Cash App
Earlier we saw that Bitcoin fees have dropped rapidly over the past year, spurring a growth in the number of transactions. This can be attributed to the smaller Bitcoin Mempool size. However, in case the number of unconfirmed transactions increases at a faster pace than the rate at which new blocks are mined, there will be network congestion. This is when the average Bitcoin transaction fees will go up.
This is the scalability problem faced by Bitcoin thanks to the limited number of nodes. However, the community is coming up with ways to circumnavigate this issue so that numerous transactions are executed quickly with low fees. Earlier this year, a user was able to carry out 42 transactions using the Lightning Network and spent just 4.9 cents in transaction costs.
The Lightning Network is a second-layer payment protocol on top of the Bitcoin blockchain that’s capable of conducting a high volume of transactions at speed by reducing the on-chain load. As such, there’s a good chance that the average Bitcoin transaction fees will remain low going forward thanks to the development of such payment protocols, thereby boosting the adoption of this cryptocurrency as a means of digital payments.