A Guide to Bitcoin Transactions
So, you have some bitcoin. And now you want to know about transferring it, specifically how long it takes. Well, we here at Lolli have the answers you’re looking for. And once you're done reading, don’t forget to shop with one of our 1000+ partners and get free bitcoin back when you shop!
Bitcoin transactions can take anywhere from a minute to an hour. On average though, each transaction takes about 15-20 minutes to settle. Settlement occurs when the block of transactions is added to the blockchain (the ledger of bitcoin transactions).
Payments sometimes require confirmation, which means they require a certain number of blocks to be stacked on top of the block their payment was made in. This ensures that the chain they are on is the main chain.
Fees are paid to the miners who fill the blocks with transactions. These fees are variable and set by the market. To increase the likelihood of your transaction being picked up by miners from the memory pool or mempool (purgatory of transactions waiting to be added to the blockchain), transactors sometimes pay a higher fee than the going market rate.
The blockchain is immutable, meaning nobody controls who exchanges with bitcoin and what payments can go on it. Be sure you have the correct amount and address for your payment. Bitcoin payments are irreversible – they can’t be reversed or canceled – while this may seem risky it makes bitcoin payments super secure.
Sidechains, like Lighting Network, are working to make paying with bitcoin super fast. Transactions are settled in seconds and are enforced with smart contracts. Sidechains move funds between parties and only settle on the bitcoin blockchain once finalized.
2nd layer solutions like Lighting have begun making bitcoin faster and more capable of making millions of transactions per second while also maintaining the decentralization and scarcity that made bitcoin so valuable and popular.
The traditional legacy system may seem faster and more convenient than bitcoin and in many ways it still is. But, that alone doesn’t make it a better system or make the US dollar the better currency. Here are five considerations to bear in mind:
- Payments are secretly expensive: that coffee you bought is actually a lot cheaper; it’s only that price because the cost of using a card is hidden in the price of the coffee.
- Payments are slow: most merchants don’t settle till the end of the day so, in reality, these systems just appear fast. They are actually slower than bitcoin in regards to the final settlement.
- Payments are cumbersome: ever tried to send or spend money internationally. It often takes several days just to transfer from one bank account into another and the fees from exchanging currencies eat into your money.
- Payments are in fiat: this has several drawbacks. Fiat is centralized, prone to inflation, easily seized, and mutable.
- Payments are risky: perhaps the biggest drawback, the traditional system jeopardizes money, data, and personal identity information. Although not a perfect solution, bitcoin, if used correctly, minimizes your risk.
So, not only are transactions possible and in some ways better than fiat (at least as a final settlement network), they're also improving. Bitcoin is still a novel technology, but it's not in its infancy by any means. It works, and it's been around for over a decade. And it's drawing attention – more and more institutional and retail money has joined the space, dedicating new minds and better resources to bitcoin's development.
Today, you can get access to bitcoin more cheaply and more conveniently than ever before. Simply shop with Lolli's 1,000+ partners and get free bitcoin sent straight to your Lolli wallet.