Bitcoin is a decentralized cryptocurrency that runs transactions without the involvement of any central bank or administrators. The bitcoin transactions are confirmed by network nodes via cryptography and recorded in the blockchain, a public distributed ledger. This transaction is not a simpler one. The bitcoin wallet and network must undergo certain steps to confirm that the amount is received by the recipient.
Fundamentals of Bitcoin Transactions
The bitcoin is not a single record of the coin. It will be registered as a transaction that has a transaction input (the bitcoin address of the sender), a transaction output (the bitcoin address of the receiver), and an amount of bitcoin that is sent. The transactions are collected into blocks. A bitcoin transaction usually references the prior transaction output as new transaction input. Since the transactions are not encrypted, it is probable to search and view transactions that are collected into a block.
Actual Transaction Time
On average, the bitcoin transaction time can be considered as a minimum of 1 hour (i.e., when the transaction is being entered in the very following block). A bitcoin transaction becomes successful when a minimum of 6 confirmations are made. The distinct computational time that the miners take to mine a valid bitcoin block is 10 minutes. However, this is applicable only when the minor has prioritized the transaction and added it in the block. Else, the transactions continue to be delayed unconfirmed in the mempool. If your bitcoin transaction is added into the blockchain and mined, you will receive the first confirmation in 10 minutes and the next five confirmations in another 50 minutes.
Factors that influence transaction time
There are mainly two factors that influence the transaction time.
- Network load
- Transaction fees
The bitcoin transactions that are being sent lumped into a large queue called mempool (also known as memory pool) until the miners (who validate new transactions and record it on the blockchain) confirm it. When a dramatic spike occurs in the transaction activities, the mempool may become jammed as various transactions wait to get included in the succeeding block.
A bitcoin transaction has to be approved by the network for successful completion. The transactions are considered to be unconfirmed or pending until a miner confirms the transaction. A new block is mined every 10 minutes on average. That is, bitcoin transactions cannot be processed instantly. When there are more transactions to be processed in the network, it takes longer to process the transaction.
The mining process needs significant efforts and technology, and therefore the bitcoin transactions are subjective to charge additional fees. Miners prioritize the transactions based on the price that received for confirmation. A higher fee can process your transaction in minimal time.
The bitcoin transaction charges are not mandated, even though they stimulate miners for the faster transaction process. The transaction fees are customarily set by the user who creates the block of transaction data to be mined. These charges and their conditional delay times change as traffic declines and flows.
Bitcoins do not exist physically. That is, neither a solid coin or a token or paper slip is available to signify the bitcoin value. Instead, it is a virtual zone as a chain of transactions that have been confirmed on the blockchain. When the transactions can only be confirmed with the help of miners which are limited, it is obvious that the transaction time becomes higher.