While you may receive a bank or mobile money transfer instantly, on-chain bitcoin transactions take longer. This article will explain why and answer the question: how long do bitcoin transfers take?
How Long Do Bitcoin Transfers Take?
The expected Bitcoin block time is ten minutes. The block time entails the time it takes miners to solve the mathematical puzzle and add a new block to the blockchain. This process is called mining, during which transactions, packed in a block, are broadcast to the network and the confirmation begins.
However, this time could be much longer because of two main factors. They include:
- Transaction fees
- The level of network activity
Note that when you send a transaction you are making a transfer. You have to wait for the miners to confirm your transfer six times. Every time a new block is added to the blockchain is another confirmation of your transaction. When the recipient gets six confirmations, then they have a guarantee that the transfer is safe and you will not attempt to double-spend the BTC you have sent.
To avoid waiting for hours or even days to receive these confirmations, you can increase the transaction fees to speed up the transaction. Since mining is a monotonous and expensive task, the fees incentivise miners to prioritise your transaction. As a result, paying a higher fee automatically allows you to jump the queue.
Conversely, if you pay low fees, miners will not prioritise your transaction, and you will have to wait longer for confirmation.
It is important to know that bitcoin transaction fees appear as Satoshis per byte. That is “one hundred millionth of a bitcoin per byte size of the transaction.”
Level of Network Activity
When the network activity increases, it creates a backlog of unconfirmed transactions in the mempool. This is a pool where all validated and unconfirmed bitcoin transactions stay as they wait in line. That means that if a lot of people are making bitcoin transfers, the confirmation delays and fees will increase. However, if the network activity is low, miners will confirm transactions faster and users will pay lower fees.
The limited number of miners and the 1MB block size slows down confirmation times when many people are making transactions.
Therefore, depending on these two factors, bitcoin transfers can take minutes to days.
Estimating the Bitcoin Transfer Time
You can use tools like blockchain.com to estimate the transfer time of a bitcoin transaction. For instance, from January 1, 2021, to January 17, 2021, the average confirmation time went from 100 minutes to slightly over 200 minutes. Based on this data, you could estimate that your bitcoin transaction could take anywhere from one hour and 40 minutes to slightly over three hours in the next few days.
Furthermore, looking at the graph above, it is clear to see why you can only estimate the transfer time. The erratic fluctuations indicate that you cannot say exactly how long a bitcoin transfer will take. You can only approximate within a certain range.
You can also see that slow confirmation times also mean higher fees. As the bitcoin price rose in the first several days of January 2021, the average fees also increased from below $5 per transaction to more than $15.
Can Bitcoin Transfers Become Faster?
Slow on-chain bitcoin transfer times are a concern to the bitcoin community. That is why developers are working on the Lightning Network (LN) to speed up transactions.
LN is a second layer solution that developers have built on top of the Bitcoin blockchain. The aim of the protocol is to enable instant, low-cost transactions. However, this project has not gained enough traction yet, and it is still in development.
Another solution, Segregated Witness (SegWit), has increased the block size by removing signature data from bitcoin transactions. By removing signature data, more space is created in a block to hold more transactions. This speeds up transactions as well.
It could be some years before bitcoin users can enjoy instantaneous transfers every single time. For now, however, you can use these methods to speed up a stuck bitcoin transaction.
To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.