Ever since cryptocurrency began entering the mainstream a couple of years ago, many have touted it as an immediate means to make money transactions.
Bitcoin and other crypto transactions are indeed fast and reliable, and it’s true that they cut out the middleman (the bank) and eliminate many time-consuming back-office processes. Despite that, and due to their complex underlying mechanisms, crypto transactions are not technically immediate.
So, more often than not, your crypto will not arrive in your wallet right away after you’ve carried out a transaction. Let’s explore why.
The main lesson you should take from this article is that, in most cases, there’s no need to panic. As we said, chances are you won’t get your crypto in your wallet immediately after your transaction.
Usually, the reason why crypto transactions take some time is that the blockchain that supports them takes more confirmations than expected. The more confirmations your transaction requires, the longer it will take to complete.
So, in simple terms, your coins don’t get to your wallet immediately after your crypto transaction, because miners are hard at work verifying the transaction and piling confirmation over confirmation for it to complete.
Let’s see how this process works.
Crypto transactions broadcasted to a network do not complete just like that. Transactions need to be recorded in a block by the network miners, and this takes time.
Once miners verify a transaction, it is included in a mined block, which means that the transaction has received one confirmation. Then, the number of confirmations for the transaction increases with each subsequent verified block.
So, think of confirmations as the number of approvals your transaction needs to be complete and be fully recorded on the blockchain. The whole point of this mechanism is to avoid the risk of double spending and make cryptocurrency transactions more secure. In fact, the more confirmations a transaction receives, the more permanent and irreversible it becomes.
Typically, most crypto exchanges require at least three confirmations before a transaction can be deemed concluded, but some may need as many as 60 confirmations. Again: the more confirmations the exchange requires, the longer it will take for your crypto to get to your wallet.
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Confirmation times usually vary depending on the blockchain.
Let’s take the Bitcoin network, for example. Just like any other blockchain, Bitcoin can process a finite number of transactions per block. Each of those transactions needs to be verified by the network participants (the miners), and this verification process results in confirmations.
Confirmation on the Bitcoin network can take around 10 minutes. However, sometimes it can take Bitcoin miners up to 30 or even 60 minutes to mine a single block and produce one confirmation.
So, in most cases, the entire process of verifying and listing transactions on the Bitcoin blockchain can take anywhere from 10 minutes to 1 hour. That’s why your bitcoin doesn’t show up in your wallet immediately after you make the transaction.
In general, this tends to be faster than cross-border transfers, which need to undergo clearance processes by numerous authorities, including banks, governments, and other regulators. But this is not necessarily always the case, and sometimes Bitcoin transactions can be slower than bank transfers or other forms of conventional payment.
It all depends on confirmations.
All trustworthy Bitcoin ATMs and crypto exchanges require confirmations for the sake of security.
But zero-confirmation transactions do exist. They occur when an exchange accepts payment as soon as the transaction is broadcast to the appropriate network, which can take as little as five seconds.
The thing is that zero-confirmation transactions are not secure, and as we mentioned above, they pose risks involving double-spending, that is, an attack where a given set of coins is spent on multiple transactions.
In general, most exchanges require at least two confirmations to guarantee security and transparency across all transactions and keep users safe.
Kraken, for example, requires six confirmations on a Bitcoin deposit, which can take around 40 minutes. In turn, this exchange requires 20 confirmations for Ethereum deposits, but this process might take as little as 5 minutes because the verification and confirmation flow on this network differs from those of Bitcoin.
On the other hand, Coinbase requires 3 confirmations for Bitcoin transactions and 35 for Ethereum transactions.
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Now, if your crypto is delayed and you believe it’s not a matter of confirmations, a series of other things could have gone wrong. Here are some tips on how to proceed if your crypto transaction is taking way more than it should:
Bitcoin ATMs boast many advantages, including the possibility to buy and sell Bitcoin with cash. However, although they are typically fast and convenient, Bitcoin ATMs also require network confirmations to enhance security.
As is the case with online crypto exchanges, it might take anywhere from ten minutes to an hour to process transactions conducted on a Bitcoin ATM. So, don’t panic if you don’t see your coins in your digital wallet immediately after the BTM transaction.
As with everything in life, patience is key. Knowing how crypto transactions work and understanding that they are not immediate gives investors some peace of mind and empowers them to operate more confidently in the market.
So, whether you’re doing business on an online exchange or a Bitcoin ATM, make sure to check how many confirmations the entity you’re using requires to deem a crypto transaction complete. Most of them offer customers useful and intuitive charts showing how many confirmations they require for each cryptocurrency and an estimated time of completion for given transactions.
That way, you can know exactly what to expect and avoid panicking for no reason.