There are a lot of specific words and terms related to cryptocurrencies you need to know and remember, so you can know what are you doing at every particular moment. When you need to complete a transaction, it should be confirmed. After that, a new block is added to the blockchain.
Every time a new block appears on the chain, the transaction is confirmed again. The more block you have between the initial and current one, the lower are chances for the transaction to be reversed. According to some sources, huge amounts of money require around six confirmations.
You also need to know that every ten minutes a new block is added due to the mining process. These blocks verify the transactions, and after that, they are confirmed. Even though it sounds confusing, it can easily be explained with an example. If you buy a Bitcoin, and you want to send it to your friend, you will create a block, as a protocol between the two parties.
But, until a new block is generated and tied up to the chain, your transaction is unconfirmed. Usually, as we said, it will be confirmed in the next ten minutes. As more people are generating block, we can say that yours is sealed forever and there is no way for a third party to go through it and cause some issue.
If you want to know about how Bitcoins can be used and traded, go to this url to get the know things better. It’s important to know that while trading you don’t need confirmations for the transaction to be completed. The main difference is that this activity is done as you already have the money for Bitcoins, or you want to sell yours. You can also read this review to learn more about trading aspects if you are not sure you are ready for investments.
On the other hand, investors must know about basic ways confirmation works, so we will mention some important things about that:
1. The important numbers
If your payment has 0 (zero) confirmations, it can be tracked and reversed. Once there is at least one, small transactions are immediately confirmed and verified. For bigger amounts (BTCs that are worth from $1,000 to $10,000), about three to five confirmations are enough.
If your amount is worth up to one million dollars, you will need at least six new blocks generated, for the transaction to be completely sealed in the blockchain. But, higher amounts are also riskier, and you have to wait for about 60 confirmations so you can be sure no one can ever access your block again.
2. Tracking the confirmations
You can track the transaction number as you transfer the money to your virtual or physical wallet. Every block generates this unique ID, so the sender and recipient can check the status of the transaction. You need to save that ID and copy and paste it into the block explorer you prefer to use, and you can check the number of confirmations after you created the block.
3. The average time to confirm a transaction
In general, we can say that every 10 minutes a new block is created in the chain, leaving yours behind. According to some sources, if you pay higher fees for faster transactions, this time can be a little faster. Depending on the day, demand, and hype, it can happen not to receive any confirmation within the same day.
If the situation is the same after 72 hours, you will have to check what’s happening, or even reload the whole thing, so you can make sure the transaction isn’t stuck in the chain. Once you unstuck it, other transactions after you will be faster, and the blocks and confirmations will be generated. Also, depending on the platform you are using, the number of confirmation until the money transfer is claimed can be higher or lower.
4. Is there any chance for faster confirmations
If you are lucky enough, and you pick up the right timing, sometimes you will need less than five minutes to receive the first confirmation. Keep in mind that the blockchain is changing almost every week, and the mining and transaction time can be adjusted to the current general situation.
If a lot of transactions are happening at the same moment, the flow is big and gives enough power to cover all the activities behind, lock them in the blockchain, and confirm there forever. But, never underestimate the factor of luck, because all the math and statistic falls in the water if there are easy tasks and activities, that are happening at the same time frame.
5. You can’t make it faster manually
Unfortunately, you can’t do anything to increase the speed rates of generating the new blocks that will confirm your transaction. But, if you pay some higher fees, you may increase the interest for that particular block – but it’s still not a guarantee that the whole thing will go faster, and you can end up spending more on fees, without any other benefit for you.
6. Other important things to know
As you now know, confirmations are actually the number of blocks generated in the chain after you complete the transaction. Also, the more confirmations are after your block, the fewer chances the attackers may have to find yours and steal your Bitcoins. But, it doesn’t mean it’s completely safe.
You must know that blockchain has some weak points, and if the hackers know how to spot them, they can catch some blocks and cause damage. That’s why it’s important to withdraw your coins to the wallet, so they are far away from the network. But, as we said, sometimes it all depends on your luck.
We hope that now you know the basic concepts of mining, transactions, and confirmations, and why they are important for the blockchain. The more confirmations after your transactions are created, the bigger the chance is that your transaction will stay protected forever in that chain. Don’t mind reading a lot of articles and tips on this, so you can understand it even better.