Bitcoin

How Long Does it Take to Transfer Bitcoin Between Wallets?

At edge, we know there are many reasons users might want to move bitcoin between their wallets. they could be spreading their money around to reduce risk, maybe they need to move it to a wallet where they can easily and quickly sell something, or maybe they’re moving from a hot wallet to a cold wallet. Regardless of the use case, the transfer is an important feature of using your bitcoin wallet.

In this article, we’ll break down how long it takes to transfer bitcoins between wallets.

Reading: How long does it take to receive bitcoin on coinbase

At first, it is important to note that all reliable wallet solutions should show transactions as “pending” or “unconfirmed” immediately after sending a bitcoin transaction. the amount of time it takes to transfer bitcoin between wallets will be considered in this article in the context of receiving at least one confirmation of a transaction.

some facts about the bitcoin blockchain

If users send bitcoins from one wallet to another, then they are using the bitcoin blockchain. there are a number of things users should know about this blockchain to help understand how long it takes to make a transfer.

fact #1: block time is 10 minutes on average

Bitcoin creates a new block every 10 minutes, and has been consistent in doing so since inception. there is a difficulty adjustment to the bitcoin hash rate every 2 weeks, which ensures that the block time remains constant no matter how much hashing power is behind the network trying to mine the next block.

This means that assuming a transaction makes it to the next block, 10 minutes is typically the time it takes for a bitcoin transaction to receive a confirmation in the receiving wallet.

That said, it could take more than ten minutes, or a little less, if the blocks are mined a little faster or slower than the average 10-minute pace. When sending a bitcoin transaction, the transaction fee that is sent to the miners is important. the higher the fee attached to the transaction, the more likely a transaction will be confirmed in the next block. the lower the fee attached to a transaction, the more likely the transaction will take multiple blocks for confirmation.

See also: South Korea crypto exchanges will shut down en masse next week | Fortune

At the time of this writing, the following image illustrates the average confirmation times on the bitcoin network over the last 60 days:

Bitcoin Average Confirmation time

The amount of time it takes for a transaction to receive a confirmation is largely dependent on the size of the bitcoin mempool.

fact #2: the mempool tells the story

the mempool is the bus station of the bitcoin network. it is where all bitcoin transactions will wait to be confirmed by being added to a block (getting on the bus). Many things affect the size of the mempool, including:

  • transaction fees
  • hash rate
  • network traffic

if there is a large queue at the bus station (mempool), the station will be full, with transactions waiting to be added to a block. this congestion means delays for many transactions. for the last 60 days, aside from a couple of spikes in growth in December, the mempool was fairly constant.

Bitcoin Mempool size in bytes

To jump ahead of other transactions at this congested bus station, one thing users can do is pay a higher transaction fee. The increased transaction fee incentive, which is a primary way miners make revenue, will entice miners to add a transaction into a block more quickly.

fact #3: ~2000 transactions per block

blockchain.com (the source of these charts) has some great information on the bitcoin network. At the time of writing, the average number of transactions included in a block is typically between 1,500 and 2,200 transactions.

Fact #4: Exchanges Seem Faster for a Reason

when buying or selling bitcoins, sometimes exchange accounts, be they coinbase, kraken or many others, are a bit faster than self-custody wallets in terms of transferring bitcoins from one account to another.

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That’s possible because exchanges like coinbase don’t put internal transactions on the blockchain. for example, we hope that users never have to sell their bitcoins, but when asked “how do you sell bitcoins?the answer sometimes means moving bitcoins from a private wallet like edge back to coinbase for sell. this requires an on-chain bitcoin transaction.

See also: Crypto market cap slumps under 1 trillion for first time since Jan 2021 | Mint

When transferring between Coinbase users, Coinbase simply holds Bitcoin in its vaults and changes deposit balances on its servers from one account to another. Similarly, if bitcoin is traded for another asset like chainlink on an exchange, the exchange only tracks that transaction internally on their servers as they have both assets in their internal vaults. these transactions are not sent to any blockchain until users transfer their assets to an external account.

This lack of on-chain transactions within exchanges is why the transfer of bitcoins between accounts is often faster on centralized exchanges.

putting the pieces together

As shown, there are multiple factors that affect the amount of time it takes to transfer bitcoins between wallets. Let’s go back to the mempool once again. we see that the average number of transactions in the last 60 days waiting for confirmation is around 10 to 15,000 transactions.

bitcoin mempool transaction count

Knowing this and our other facts above which show 10 minute block times with ~2000 transactions per block, the natural assumption is that, all else remaining equal, setting a low or average transaction fee (which a user’s wallet software will calculate for them) to move Bitcoin between wallets will result in transactions sitting for a while in the mempool. Ten thousand transactions in the mempool could mean ~4-5 blocks worth of transactions getting filled before a transaction gets added into a block. And we know that that number of blocks means it could take somewhere between 40-50 minutes for the transfer to confirm.

With a higher fee, users can increase the priority of their transactions.

Now, this does not mean that users will not see any activity in their wallet for almost an hour. many wallets will (and should) show transactions as “unconfirmed” or “pending” before receiving a confirmation.

A single bitcoin transaction could be $200, $5 million, or any other arbitrary amount moving at the same time. For the sake of comparison, this wait time is quite fast when compared to other base layer settlement systems, such as a wire transfer.

With the many complexities involved with transferring bitcoins between wallets based on current market conditions, users should use software that helps make this user experience as easy as possible. If users want a wallet that understands and optimizes for these complexities, taking much of the worry out of sending and receiving transactions, try edge today.

See also: Causes of the 2018 crypto rout

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