How are transactions carried out in the Bitcoin network?
A blockchain is a chain of blocks created by miners. They find the blocks and get a 12.5 BTC reward per every block. That is why miners are financially interested in finding these blocks (providing their computing power to search such blocks). Additionally, it is necessary to fill the previous block with transactions (such transaction are the same payments you send to or receive from another person) prior to finding the next one. When you send cryptocurrency from your wallet to another wallet, the transaction first gets to the so-called Mem Pool. To confirm the transaction, miners have to take it from the Mem Pool and insert it into a block.
Previously, there were few transactions and miners took all the transactions and put them into new blocks free of charge since miners were unable to find a new block until the previous block is full with transactions. Back then, all the transactions were almost instant and free. As the Bitcoin’s popularity is constantly growing and so is the number of network participants, the transactions have become very frequent. Since each block is 1 MB in size – the commission fee (the amount of money you are ready to pay miners to prioritize your transaction among a large number of unconfirmed ones) has become the motivation for miners’ decision on which transaction to place in the new block in the first place.
This is a brief description of a Bitcoin transaction:
- Specify the amount and recipient’s wallet and send the transaction to be confirmed into the Memory Pool of the network.
- The transaction waits for 3 confirmations minimum (ideally 6, to be sure the transaction will NOT be canceled) from miners who have to estimate if the commission fee you allocate for the byte is appropriate and if your transaction fits into the existing maximum 1 MB block size.
- After miners have confirmed the transaction, it is recorded to the blockchain and your payment (money/funds) is accrued to the recipient’s wallet.
What influences your payment delivery speed in the Bitcoin network:
- The Memory Pool network load. The more transactions all participants send to the Mem Pool, the larger the total transactions volume is. Moreover, because Mem Pool actually consists of users’ active nodes (computers) which have different computing power, the Mem Pool has a limited volume.
- The transaction commission fee for the byte is too low.
- The transaction is too “heavy” and it has not fit into the existing block. The transaction volume may be small if you have received a 1 Bitcoin transfer or you carry out a 1 bitcoin transaction. However, it may also be larger if you have received 0.1 Bitcoin 10 times and collected 1 Bitcoin of those parts to carry out a transaction. In the first case, the outgoing transaction will be smaller in volume than in the second one.
What is the result?
The cryptocurrency sent from a certain wallet may get hung up and unconfirmed. In such cases, funds may stay suspended in the Mem Pool for 72 hours, and then they return to the wallet. After that, the wallet may automatically carry out the transaction again and return the funds to the Mem Pool.
How can I verify if my transaction is suspended?
- Check your transaction status here: https://blockchain.info
- Check the list of unconfirmed transactions here: https://blockchain.info/en/unconfirmed-transactions
How do I speed up the transaction?
- Before sending your payment, check the average commission fee for the byte in the network and set it a bit higher (for this reason, it is better to choose a wallet that supports manual commission fee setup): http://www.statoshi.info/dashboard/db/fee-estimates
You can also check it with this website: http://bitcoinfees.21.co/#delay
- You can also speed up your transaction confirmation free of charge manually adding its hash to the Mining Pool (however, there are restrictions on the number of such transactions per day): https://www.viabtc.com/tools/txaccelerator/
- You can pay to speed up the transaction if it involves a large amount of money:
- In case all three abovementioned options do not suit you, you can wait until the network “forgets” your transaction (it usually takes up to 1 week) because it was not included in the blockchain, and as the result, the Mem Pool is free. In this case, all you have to do is to refresh your wallet, and your funds should appear in it again.
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