In the age of computers and the Internet, we continue to experience problems sending money. Bank transfer to another country can take up to several days and is subject to large commissions. Cryptocurrencies have become a cheap and fast alternative to it.
Bitcoin was conceived as a means of payment, and its network serves as a payment system. Today we will tell you how payments are made in blockchain technology, how much bitcoin goes to the recipient and whether it will be expensive.
How do Bitcoin payments work
Traditional payment services consist of servers and databases. The server provides the system, and the database stores information about the movements of funds. In the Bitcoin network, the miners perform the server role, and the database is the blockchain.
Blockchain is a sequence of blocks. Miners are looking for a block that satisfies the specified conditions. Miner, who was the first to find, records in his body that he has been paid a reward, and then includes all user transactions. Rewarding decreases with time: first it was 50, then 25, and now 12.5 BTC.
It would seem that when the system stops paying for the search for new blocks, the miners will leave, and Bitcoin will die, because it will lose those thanks to whom it works. To prevent this from happening, and the miners have saved their money, they charge for the inclusion of payments in the blockchain. Its size is determined by the user himself, but the miners prefer transfers with a large reward, because their earnings depend on it.
Sending coins and paying a fee is only half the battle. No one will give a guarantee that you have not made several transactions without having the means. To prevent double spending, each one needs confirmation.
A transaction is considered confirmed from the moment it is included in 6 blocks. So how much does Bitcoin confirm? 10 minutes is allowed for finding one block. Theoretically, confirmation will take 60 minutes.
The number of confirmations was chosen on the basis of mathematical studies that showed that the fraudster would need to capture 10% of the network’s power in order to fake a financial transaction. It is quite expensive, and the goal does not justify the means.
The parties to the transaction may agree and reduce the number of confirmations to two. This is usually what stores do when the purchase amount is small.
In theory, everything was fine, and in practice the first time it worked. Payments were cheap and quick. Nobody wondered how much a bitcoin translation could go. But soon the popularity of Bitcoin has greatly increased, and the block size is limited to 1 MB. There were so many people who wanted to send coins that the blockchain stopped holding them in one block. Queues began to form.
The real problems started in 2017. Users complained that they had to wait several days for confirmation of the transaction.
This was easily solved by an increase in the commission, but it made the use of Bitcoin very expensive or completely pointless if the amount is a penny (the commission will be more than that).
What affects the speed of the transaction
To understand how much time a Bitcoin transaction goes, you need to understand what affects the speed of confirmations.
Network congestion is a natural cause of the slowdown process. The popularity of cryptocurrency has greatly increased, and with it the audience of network users. The system does not cope with the number of applicants, so queues are formed. How much time the transfer of bitcoins is going to help determine the special services, which we describe below.
The reason follows from the previous one. Previously, the charge for network services was always the same, because all movements of funds easily fit in the nearest unit.
Now users began to offer more remuneration to miners so that their transactions could be processed faster. Transfers with low commissions are processed last. There is a possibility that they may not be processed at all.
In conventional payment systems, the fee depends on the amount. Blockchain is not a rubber one, so its place is most valued in its system. Sending a large amount will cost less than a few small transactions.
Spamming is called sending a lot of small payments to create an even bigger queue and paralyze the network. Bitcoin was subjected to the greatest attacks in November 2017 immediately after the fork (offshoot from the main blockchain), as a result of which a new Bitcoin Cash coin appeared.
Conducting forks is very beneficial for the organizers and destructive for the cryptocurrencies themselves. The creators reserve a certain amount of coins for themselves initially, and when a new cryptocurrency unwinds and grows in price, they may well weld on its sale.
Bitcoin Cash management has organized a spam attack on the Bitcoin network. Thus, they wanted to convince users that Bitcoin has become obsolete, and they need to go to fork. We will not say exactly how long Bitcoin goes during spam attacks, but in those days the number of unconfirmed transactions reached 200 thousand. At the moment, spam attacks are not observed, but no one guarantees that the situation will not arise again.
How to check transaction status
Blockchain allows users to remain anonymous, but its work is transparent. Anyone can view information on all movements of funds.
No matter how many bitcoins go into your wallet, you can always check the status of the payment.
- Go to www.blockchain.com;
- In the top drop-down menu, sеlect “Data” – “Explorer”;
- On the page that opens, in the Search field, enter the transaction hash code and click the Search button;
- The service will redirect you to a page with detailed information, where the status of the operation will be visible.
If the transaction is still unconfirmed, and a long time has passed, you will want to know how long to wait. There is a special service that allows you to roughly tell how much a bitcoin transaction goes.
- On the website www.blockchain.com on the detailed page of the transaction, find the “Pay per byte” indicator calculated by the service.
- Open the bitcoinfees.earn.com resource. On the main page is a table that is updated in real time. In the “Fees” column, find the resulting value.
- In the “Time” column you will see the transit time, and in the “Delay” column the number of blocks before confirmation.
In the event that the transaction does not fall into the blockchain, after 72 hours the money will be returned back to the sender’s wallet. Coins can freeze for two reasons:
- sending bitcoins to the wrong address, which does not exist;
- too small commission, for which none of the miners want to include a payment in the block.
In the first case, nothing can be helped, the coins are lost forever. The second case is easily preventable. Instead of wondering how much a bitcoin transfer transaction can go and whether it will freeze at all, you can use the “recommended reward” option when sending coins. Many modern cryptocars have such a built-in function.
How to avoid confirmation problems
Follow the recommendations for fast transfers, and you don’t have to think about how much Bitcoin is paying:
- Appointment of an adequate commission.
- Large amounts are faster included in the blockchain.
- Exposure of coins on the wallet matters. The system gives confidence to the funds that have long been on the account.
- Using services with your billing system. It’s about online wallets. If you send coins as part of this service, it will not transfer them in the Bitcoin system, but simply updаte your balance, because all the users’ funds are on its Bitcoin address.
- Using transactions with public information about recipients and senders. They are processed faster, but not all fit.
- Using a multi-signature is an additional signature that confirms the reliability of the operation.
Ways to accelerate
You neglected the recommendations from the previous section of the article, and the money stuck? When you know how long Bitcoins go to your wallet, and realize that you can’t wait that long, use the following methods:
- Commission increase. As long as the translation is not included on the blockchain, you can rеplace it with another one with a larger commission. But if you try to do this, the network will perceive the attempt as a double waste and reject. To avoid this, you need to enable the “Opt-InRBF” option during the initial sending. Note that not all miners work with this technology, so it will take longer to confirm than with a regular transfer with the same commission.
- Transaction boosters. Usually such services are provided by large pools. They often release blocks, so your payment can be made to the nearest one found. Of course, not free. The most famous service is provided viabtc.
The blockchain technology was created for fast and cheap transfers to anywhere in the world. But life as always made its own adjustments, and we returned to what we wanted to leave. To quickly transfer money, you need to pay more.