Cryptocurrency users have probably come across the transactions that took more than an hour. In this article, we will tell you why cryptocurrency transactions can take a long time to process, what determines their speed, and how to speed up cryptocurrency transactions.
How blockchain affects transaction speed
All cryptocurrencies are based on blockchain technology. Each coin has its own blockchain, so the speed differs for different cryptocurrencies. This technology has 2 parameters that affect the time of transaction:
- time to generate a new block. The cryptocurrency transaction will be completed only when the information about this transaction is included in the new block of the blockchain. The faster the blocks are generated, the higher the transaction speed;
- block size to transaction size ratio. The more transactions blockchain can write in one block, the faster the transactions of all users will be processed.
For example, the average time to create a Bitcoin block is 10 minutes. That is, the transaction will not be completed in less than 10 minutes. If there are many transactions, then the transaction confirmation time will increase. On the Ethereum blockchain, the average block generation time is 13-15 seconds.
Dash is intended for everyday purchases, so its developers initially foresaw the problem with the block generation time. The blockchain generates new blocks every 2.5 minutes, but it takes only 1 second to complete the transaction. To complete the transaction, the blockchain doesn’t need to wait for the transaction to be included in the block, it is enough to confirm the transaction by miners.
How the fee affects the transaction speed
The cryptocurrency transaction will be completed only after validating by miners. Without this confirmation, the transaction cannot be included in the block. The block size is limited and there are situations when there are more users willing to make a transaction than the block can accommodate. There is a queue for checking and validating transactions. The position in this queue depends on the fee that the user charged for the transaction. The higher the fee, the faster the miners will validate the transaction.
The transaction fee amount is dynamic and depends on the load on the blockchain network at the moment. The more users make transactions, the higher the queue and fees can be. Therefore, it is impossible to name one amount of the transaction fee, which will always be relevant.
You can see the relevant fee amount on the blockchain explorer website of the cryptocurrency you are sending. For example, you can view the recommended bitcoin transaction fee on the blockchain explorer website. Depending on the fee, the transaction can take from 10 minutes to several days. In November 2020, Bitcoin transaction fees in terms of US dollars range from $0.2 to $11.2.
Ethereum blockchain developers have created a separate unit of account for transaction fees called gas. You can check the current fees on the dedicated page of the Ethereum blockchain explorer. It shows 3 options for transaction fees: low, medium and high, and the transaction speed for these options. For the user’s convenience, the cost of gas for these options is indicated in US dollars. There is also a scale on which you can specify the fee yourself and see how long this transaction will take. In November 2020, the average Ethereum transaction fee in terms of US dollars is between $0.9 and $ 2.3.
Dash transaction fees are charged in a separate unit of account called Duff. Average Dash transaction fee in November 2020 in US dollars is between $0.002 and $0.003.
Most cryptocurrency wallets set an average transaction fee. If your priority is the speed of the transaction, then you need to manually set the fee above the average value. And if your priority is savings, then you need to set the fee below the average value.
If you withdraw cryptocurrency from a wallet on the Bitzlato platform to an external wallet, then the transaction will be confirmed by the network within 10-15 minutes. Withdrawals from the Bitzlato wallet are made from a collective address in order to reduce the transaction fee. The size of this fee may differ depending on the network load and the specific cryptocurrency. You can see the current transaction fees on the wallet statistics page or in the withdrawal menu.
The speed of processing a cryptocurrency transaction depends on:
- the cryptocurrency you are transferring. Blockchains of different coins generate new blocks at different rates;
- transaction fees. If you want your transaction to go faster, then you need to see the average transaction fee on the blockchain explorer’s website and set a fee at which the transaction goes through quickly;
- load on the blockchain network. It directly affects the cost of the transaction fee. The more people make transactions, the higher the load and the fees.