What You Need To Know About BTС Transactions: Speed, Fees, And More
An average Bitcoin transaction takes about 10 minutes to be confirmed. What happens during this time? Why is it so long? And why can’t you just transfer funds from one wallet to another? Bitcoin is the world’s first cryptocurrency and is one of the slowest. However, like all other coins, it runs on the blockchain, so if you understand how it works, you’ll be able to understand other networks, too.
Several events occur during the 10-minute period between sending and receiving funds. Transactions are verified and broadcast to a network of Bitcoin nodes, then they enter the blockchain’s memory pool, where they are confirned by network miners based on complex computations. All this is necessary to protect the network and prevent the confirmation of invalid or malicious transactions. This is how it works.
Bitcoin transaction confirmation: first steps
Whenever you click “Send” in your crypto wallet, you create a transaction that includes information about the amount, the sender, and the receiver. The only way to prove that the funds belong to you is to sign this transaction with your private key. Non-custodial wallets like Guarda and Atomic store these keys on your device in an encrypted form and sign transactions automatically.
Your wallet then wallet broadcasts this transaction to the network of Bitcoin nodes, a community of enthusiasts that ensures the security of the network.
Your transaction information is matched with blockchain data by nodes to verify its validity, and if it is, the transaction is forwarded to miners.
How do miners verify transactions?
When the initial verification of a transaction is completed, it is sent to the memory pool, or mempool, where all transactions are kept until they are confirmed and added to the blockchain. At this stage, your transaction is still labeled as “unconfirmed” as stated in blockchain explorers like Blockchain.com:
When you set a high network fee in your wallet, your transactions will be prioritized over the rest since miners will have more incentive to pick them up and mine them first. Essentially, miners put a few hundred transactions together into a block, and then run them through a hashing algorithm to find the best block hash according to the protocol. Hashing is a trial-and-error process that requires a lot of processing power. Bitcoin mining is so expensive for this reason, and this is what keeps the network secure. Any miner who wants to add false or malicious transactions to the blockchain would have to control huge resources in order to do so, making such an attack unprofitable.
Your transaction receives 1 confirmation if the miner who hashed and picked up your transaction along with the other ones wins the competition and gets the right to add their block to the blockchain:
In either case, your transaction will get into one of the closest blocks or the closest one (which takes about 10 minutes). If the network is highly congested, it may take one or more hours to process your transaction, but this is mostly the case for low-fee transactions because miners don’t want to deal with them.
Can I get my transaction confirmed faster?
It is technically impossible to mine your transaction faster than 5–10 minutes due to how the Bitcoin protocol was designed. However, you can ensure that miners pick up your transaction as fast as possible by setting a proper network fee.
Crypto wallets like NOW Wallet have special sliders that allow you to set an optimal fee for Bitcoin transactions so you don’t have to worry about your payment getting stuck in the mempool. The wallets monitor block explorers to show you what the best fee is to get into the first block. The optimal fee will be higher if the blockchain’s congestion rate is high at the moment. It makes sense to pay more if you need to send your coins right away amid high market activity rather than wait for several days until your transaction is confirmed.
In most block explorers, you can view the mempool yourself before sending the transaction to see how congested it is. With an average congestion rate, you may set an optimal fee by default.
It’s important to remember that your transaction will barely be able to be sped up after it’s sent. Tools for doing so exist, but they are technically complex, sometimes require private keys, and don’t guarantee success. It is therefore never a good idea to set Bitcoin fees below 10 satoshis/byte.
How do I set fees based on the mempool data?
If you’re an experienced crypto user, you can manually check the mempool, examine unconfirmed transactions, find out what fees other users pay, and calculate the fee you should set.
There are, however, tools to facilitate this. Take a look at Bitcoinfees.earn.com, for example. It displays how many unconfirmed transactions with different fees wait for approval at any given moment and the estimated delay in blocks and time. Moreover, it displays the number of transactions in each fee category that have been confirmed:
Alice wants to buy some Ethereum for Bitcoin using ChangeNOW. She opens her Trust Wallet, enters the pay-in address provided by our service, and enters the amount she wants to send. To set an optional fee, Alice goes to Bitcoinfees.earn.com.
Since Alice wants to swap the funds as soon as possible, she needs to set a high fee. She finds out that the most successful transactions currently go with a fee of over 111 satoshis/byte. So she sets this fee and her transaction is confirmed in 8 minutes. The transfer is done, and ChangeNOW will send Ether to Alice in a matter of moments.
Bitcoin is one of the slowest cryptocurrencies: it processes a block every 10 minutes, while Ethereum does so in 5 seconds, and Solana wins with 400 ms. However, Bitcoin has set high standards for blockchain development, and many of its principles have been implemented in other digital assets.
A Bitcoin transaction sent from your wallet goes to a mempool, where it’s picked up by miners and mined together with other transactions in a block. You can set your fee high to encourage miners, and your transactions will be confirned within 10 minutes. To determine a fee size, check your wallet’s Bitcoin page or use special platforms that suggest fees based on the current blockchain congestion data.