How Long Does a Bitcoin Transaction Take?
Bitcoin is a type of currency that has become extremely popular in the last decade. It is a new type of currency that isn’t regulated by a single government or company. It creates a public system that anyone can access and prove that everything is Legitimate.
These are the reasons people have flocked to Bitcoin in the millions. It is an opportunity to make money, create a better system, and help everyone in the world out.
However, with so many people moving to Bitcoin, Bitcoin transaction times have increased. Read on to find out how long it might take you to get your Bitcoin.
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Related: How to Pay with Bitcoin
What Is a Bitcoin Transaction?
To keep things simple, a Bitcoin transaction is simply one person requesting Bitcoin from another person. Once the request is out on the internet, the person who is giving the Bitcoin away gives it to the requester.
How this is done is by the requestor providing the giving person an address. Once the person giving the Bitcoin away has the address, they can simply deposit the Bitcoin into that address for the requestor to pick up at any time.
The reason that the Bitcoin is safe is that the requestor has a key to the address that no one else in the world has. So the requestor is the only one who can access the Bitcoin they were provided.
The Bitcoin that was given is then placed onto the BlockChain, where the requestor can pick it up at any time. The BlockChain is just a public area on the internet where all of these addresses are stored. The transaction time comes into play when the requestor wants to pull the Bitcoin off of the BlockChain.
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How Are Bitcoins Transferred?
Transferring Bitcoin is a little more complicated, but it can be broken down into a few steps to keep things as easy as possible to understand. You will have inputs, transactions, and outputs in the transfer process of Bitcoin.
When someone is attempting to exchange Bitcoin or give Bitcoin to someone else, we have a transaction that takes place between multiple parties. The person sending Bitcoin to someone else sends it out in different blocks. This is the Bitcoin being input into the BlockChain.
Once the Bitcoin blocks are in the BlockChain, it is free for the person who has the key to the address of that Bitcoin to pull it off of the BlockChain. For this to be done, you have to pay someone to mine the blocks of Bitcoin off of the BlockChain.
For someone to facilitate this transaction and transfer the Bitcoin, the block has to be verified by the miner to ensure the transaction wasn’t tampered with or invalid in any way. Since the miners are taking their computing power to ensure that your Bitcoin is transferred successfully and safely, they ask for a fee to facilitate the transaction.
This fee is typically a very small percentage of the total transaction of Bitcoin. The person sending the Bitcoin can make this fee larger or smaller depending on how much they want to reward the miner for processing the transaction.
Once the transaction is verified by the miner, the recipient of the Bitcoin can pick up their Bitcoin and store it in their online or offline wallet off of the BlockChain. This is considered the output portion of the transaction because the Bitcoin is leaving the BlockChain.
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How Long Does It Take to Complete a Bitcoin Transaction?
This is more difficult to answer than you would think. A person would hope that their Bitcoin transaction would happen in a matter of seconds, like technology demands nowadays. That is not the case, though.
You can see a transaction take anywhere from a few minutes to a few days depending on several factors. The most important factors are how busy the BlockChain is at the time (network activity) and the fee that the miners will get for verifying the transaction for the recipient.
The standard for mining and confirming a Bitcoin transaction is to process 6 different confirmations to ensure that the Bitcoin is safe. This is typically referred to as 6 different blocks that have to be mined.
The average time for mining a block is 10 minutes, and when 6 blocks have to be mined for one transaction, it means it will take an average of 60 minutes to process a full Bitcoin transaction.
What will speed this time up the most is if you apply a higher fee to the transaction. A higher fee means that miners get more money for processing your 6 blocks, so you will get more miners processing your information this way.
The reason it can take a few days is if you have applied a very small fee to the transaction, and the network is backed up due to high activity. The more activity there is, the more chance that someone is offering a higher fee than you to process their transaction.
So, if you need to speed up your transactions, you can simply increase the fee you’re paying to the miners and it will receive a higher priority!
Related: How to Buy Bitcoin Cash
Simple or Not so Simple?
Bitcoin can be as complicated or simple as you want it to be. A lot of people interact with Bitcoin purely by buying and selling goods for Bitcoin. They know the value of Bitcoin and are happy to take payment from a decentralized currency.
What is important to everyone, though, is the Bitcoin transaction time for them to receive their money. Decreasing this time is important for the longevity of Bitcoin because no one wants to wait a week just to receive payment for a job they did.
If you are interested in how you can start using and engaging with Bitcoin, feel free to read more of our blogs or contact us!
Ian Kane is the COO of Ternio, the startup dedicated to solving the issues related to blockchain scalability and payment utility of cryptocurrency.