If you’ve ever sent or received cryptocurrency, you’ve likely felt that initial worry when you don’t see funds add to your wallet immediately. You might begin thinking, “did I send my cryptocurrency to the right address?” as you wait to see the cryptocurrency appear in your account. Maybe you’ve even refreshed the blockchain to see how many confirmations your cryptocurrency transactions has received. So how long do you wait before you realize something might’ve gone wrong?
We must first define what the speed at which cryptocurrency transactions occur means. In general, two criteria determine the transaction speeds for a given. The first is the time it takes for cryptocurrency to move from one wallet to the other (also known as the confirmation time). The other is the number of transactions per second (tps). Transaction speeds will vary depending on a few factors, including the congestion of the network and the fees users pay when conducting their transactions. Due to the number of variable factors, the length of time a cryptocurrency transaction takes to occur is not definite.
How long does a bitcoin transaction take?
Each transaction will go through several confirmations to ensure that transactions can’t be reversed or double spent. The process occurs every time the network spends a new block.
When a network provides a confirmation time, it is also important to note that it is an average. Let’s look at bitcoin as an example. Crypto exchange in Dubai will suggest it takes 60 minutes to confirm your transaction. Since the value is an average, it might take 10 minutes one time or two hours another. The cryptocurrency will likely state this range as the variance. At times, this might mean you will end up waiting days before you notice a complete transaction on the bitcoin blockchain.
Submitting a transaction with low fees will almost guarantee that your transaction time will be longer. Miners will tend to favor the higher fee transactions first. Many industry experts will make the comparison to receiving a police escort through a congested highway. That said, if you don’t need your digital currency immediately, a longer transaction time might be worth the lower fees.
A look at the top cryptocurrencies
Cryptocurrency transaction times depend on the digital currency in question. Let’s start by considering bitcoin. The speed at which bitcoin transactions occur is dependent on the size of the blockchain fee and the network load. As a result, as a bitcoin user, the higher the fee you pay, the fewer blocks needed and the lower the transaction time.
On an initial comparison, some of the most popular cryptocurrencies and their transaction times are as follows:
- Bitcoin: 7 transactions per second and an average of 60 minutes for a confirmation
- Ethereum: 25 transactions per second and an average of 6 minutes to confirm
- Litecoin: 56 transactions per second and an average of 30 minutes to confirm
- Dash: 56 transactions per second and an average of 2 minutes and 39 seconds to confirm
- EOS: 2800 transactions per second and an average of 0.5 seconds to confirm
- NEO: 1000 transactions per second and an average of 15 seconds to confirm
- Cardano: 1000 transactions per second and an average of 10 minutes to confirm
- Ripple: 500 transactions per second and an average of 3-5 seconds to confirm
Across the industry, many recognize Ripple (XRP) as having the most consistent transaction times. But, developers also designed it for very different reasons, including transferring oil and gold over the network.
The impact of the lightning network
Currently, networks like Bitcoin and Litecoin aren’t operating at their full transactions per second. The solution? The Lightning Network (LN). The LN is an additional layer added to Bitcoin’s network that enables parties to conduct transactions off the blockchain (off-chain transactions). The purpose of this innovation was to reduce tps and decrease the costs of operating bitcoin’s blockchain. The result is that transactions on the bitcoin network may occur in as little as 30 seconds with the Lightning Network. To use this feature, cryptocurrency holders will need to install a wallet that is lightning enabled.
The main concern with using the lightning network is that one of the transacting parties can close the channel and take the funds without the other knowing. The practice can be known as fraudulent channel close.
Final words
We can note blockchain’s enormous potential due to its high transaction speed, transparency, security, and immutability. The main issue is the technology’s scalability, which is one of the prime reasons that the technology has yet to become mainstream. Unfortunately, as cryptocurrencies become more popular, they face a double-edged sword since more traders increases wait times on the network. Several new cryptocurrencies have attempted to meet this challenge. However, the day that developers truly resolve this concern will be the day blockchain will become mainstream, and we see more businesses use it as a payment method.