A question on transaction speed.

[Stepstowealth]

can we stop telling people that ask if transaction speed is a benefit of using bitcoins for payment? I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

What determines speed of transactions?

I want to learn.

[NeuroticFish]

What determines speed of transactions?

The quick answer is: the fee you're paying (counted as sat/vByte)

Transaction confirmation means that it's included by miners in a mined block. The miners will (almost) always include the ones with higher fee, since they want to earn more money.
And with new blocks being mined every ~10 minutes, sometimes, when the network is more busy, a higher fee can get your transaction mined faster.
For a better view you can take a look at: https://mempool.space/

The withdrawals from exchanges go "faster" because the exchanges overpay the fee.

[Upgrade00]

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

Transactions within exchanges usually just involve changing of balance sheets and not actual transfer of bitcoins on chain, this is the reason it is presumably faster than from one wallet to another.

What determines speed of transactions?

• Mempool space, i.e, how clogged the network is at the time,
• Feerate, this is the amount paid for the confirmation of the transaction. It's counted in sat/vbyte.
• Number of inputs and outputs, which influence the fee paid and indirectly affects the tx speed.

[hosseinimr93]

I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

If your friend is comparing bitcoin with altcoins, tell him/her that you may get the first confirmation in many altcoins much faster, but altcoins need a much higher number of confirmations, so a transaction is equivalent to a bitcoin transaction with only 1 confirmation.

[odolvlobo]

can we stop telling people that ask if transaction speed is a benefit of using bitcoins for payment? I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

While cash and some other crytocurrencies are faster than Bitcoin, Bitcoin is faster than most other forms of payment.

Keep in mind that card and bank transactions are not as fast as they seem. First, the merchant isn't credited the money for at least a few days, and even after that they must wait for months before they know for sure that they can keep it. The merchant allows the customer to take the purchased items immediately because they are willing to take the risk that they will eventually receive the money.

It is the same with Bitcoin. Once your friend has broadcast the transaction, the receiver of the bitcoins can just assume that they have them, although there is a risk that they will ultimately not receive them, as in the case above. Furthermore, the receiver is free to use the bitcoins immediately even though the transaction has not yet been confirmed.

Then, of course there is Bitcoin's Lightning Network that provides instantaneous payments.

[JeromeTash]

I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

Bitcoin blocks are mined approximately every 10 minutes, sometimes a confirmation can happen within 1 minute of the previous block, other times it can even take more than 50 minutes for a block to be confirmed.

But the biggest factor if one wants their transaction to be confirmed in the next block is the transaction fee rate used. I am somehow certain that your friend did not use the Optimal fee rate, thus a delay in confirming his transaction

Am I missing something, is the movement of bitcoin from one exchange to another faster than moving bitcoins from one wallet like electrum to another?

Bitcoins from an exchange to another have to also get confirmed using the Bitcoin network, so it won't be any different if the same fee rate is used as for a transaction from an electrum wallet to another.  The advantage is that exchanges broadcast the transactions with a fee rate that is even higher than the optimal one in most cases, so chances of the transaction getting confirmed in the next block are very high.

Internal transfers (from one account to another of the same exchange) do not involve Bitcoin network confirmations, so these are usually instant.

[sheenshane]

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

What determines speed of transactions?

It matters about these combinations.

• Network congestion
• Transaction fees
• Block size limit

The speed of a Bitcoin transaction can be influenced by a combination of these factors, and it's important to consider them when sending or receiving Bitcoin to ensure timely processing.  The link shown above, always check the network congestion first before such a transaction so that you'll know the fee, usually, ain't in a hurry when making a transaction, and within an hour the transaction will be confirmed.

You can use also a free service of Bitcoin transaction accelerator service, I usually used ViaBTC.

[hosseinimr93]

• Transaction fees

Fee rate, not fee.

• Block size limit

The block size limit isn't a variable at all and it doesn't make sense to say the transaction confirmation time depends on block size limit. The block size limit is always 1 vMB or 4 million weight units.

You can use also a free service of Bitcoin transaction accelerator service, I usually used ViaBTC.

It may worth mentioning that you can use their fee service only if the fee rate used for your transaction is at least 10 sat/byte.

[UchihaSarada]

Plot your transaction in mempool

Input & output affect transaction size

Fee rate in general plots your transaction in priority of miners from top of mempools.

However, Transaction size * fee rate will combine to result in your transaction fee that will be used by miners when they prioritize transactions from top of mempools to confirm first.

Two transactions with same fee rate but with different transaction sizes will have different priority from miners. A transaction with bigger transaction size and transaction fee will be confirmed first. Another transaction with lower transaction fee if won't be confirmed in a same block, will be confirmed in next one or few blocks by miners.

[jrrsparkles]

can we stop telling people that ask if transaction speed is a benefit of using bitcoins for payment? I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

What determines speed of transactions?

I want to learn.

In layman term the transaction fee decides the transaction speed, so higher you pay the chances of your transaction will be included into the next block itself. For checking the current mempool status few members already posted the links so make sure he is using the right fee for faster transfer.

And no worries even if the transaction stuck for longer time period when you enabled Replace-by-fee (RBF) so you can change the feed to higher if mempool gets clogged after you broadcasted the transaction.

About exchanges they always use a lot higher fee than current fee required for transaction that is why it gets confirmed soon but its isn't that instant cause they send withdrawals by batch in the mean time you have to wait too.

[pooya87]

can we stop telling people that ask if transaction speed is a benefit of using bitcoins for payment?

There is a lot of benefits in using bitcoin and speed of transactions is one of them. Yes bitcoin does have the fastest transactions in the world (that includes centralized payment systems and altcoins)!

Unfortunately certain scam altcoins (like ethereum and ripple) have been advertised as "fast" just because they have faster block generation. The thing is "speed" is NOT defined as the time your transaction is included in a block BUT it is defined as the time it takes for your transaction to become irreversible.

In most traditional payment systems (your bank cards, PayPal, etc.) the transaction remains reversible for months.
In a lot of altcoins it takes weeks for the transaction to go deep enough in the blockchain to be considered irreversible. Some altcoins it never becomes irreversible because they have mutable blockchains or they are centralized.

When it comes to bitcoin because the blockchain is immutable and it is decentralized and it works correctly, with 1-3 confirmation which takes between a couple of seconds to half an hour, your transaction becomes irreversible.
This is why bitcoin has one of the fastest transactions.

[yhiaali3]

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

Mostly yes, the movement of bitcoins from one exchange to another is faster than transferring bitcoins from one wallet like electrum to another, unless you pay a higher fee in which case you can get a faster transaction.

Another thing, if you and your friend work on the same exchange, the bitcoin will be transferred from your account to his account instantly without the need to send it via the bitcoin network, so in these cases (internal transfer) the process is very fast.

[Hyphen(-)]

can we stop telling people that ask if transaction speed is a benefit of using bitcoins for payment? I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

The transaction fee rate, which is the sat/bit you pay when you initiate the transaction, determines the speed of the transaction from one wallet to another. The miners are rewarded by the transaction fee we paid during such a transaction, so they process transactions with a high fee rate faster than those with a low fee rate, which is why the transaction takes time to process.

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

Third-party crypto exchanges typically have a fixed transaction fee rate for their transactions, so sending Bitcoin from one exchange to another will only be dependent on your device network and will take very little time.

What determines speed of transactions?

The rate of the transaction fee paid to initiate the transaction in the mempool.

[Plaguedeath]

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

When you want to withdraw your coin from exchange to another, you're overpaying the fees since the exchange use fixed fee.

Most wallet usually set default medium speed when you want to withdraw your money, but you can customize yourself by choose high priority, it's more faster and cheaper rather than use exchange.

I'd suggest to use lightning network, the transaction will be confirmed less than few seconds, it will beat any other altcoins network.

[hosseinimr93]

Two transactions with same fee rate but with different transaction sizes will have different priority from miners.

You are completely wrong.
Miners prioritize transactions based on their fee rate (the fee paid for 1 virtual byte of data) and it's possible that a transaction paying lower absolute fee has higher priority than a transaction paying higher absolute fee.

[UchihaSarada]

Two transactions with same fee rate but with different transaction sizes will have different priority from miners.

You are completely wrong.
Miners prioritize transactions based on their fee rate (the fee paid for 1 virtual byte of data) and it's possible that a transaction paying lower absolute fee has higher priority than a transaction paying higher absolute fee.

I did not say a transaction with a lower fee rate will be confirmed ahead of a transaction with a higher fee rate.

Fee rate is important but not only this. Transaction fee will be a multiplier of fee rate and transaction size and I meant if two transactions that use a same fee rate, a transaction with bigger size will confirmed ahead of a transaction with smaller size. This happens if two transactions won't be confirmed in a same block.

If they won't be confirmed in a same block, a transaction with smaller size will likely confirmed in a next block if mempool won't be loaded up suddenly with too higher fee rates.

They (same fee-rated transactions) won't be confirmed based on "first comes, first serves" in mempools.

[CageMabok]

can we stop telling people that ask if transaction speed is a benefit of using bitcoins for payment? I say this because my friend has been complaining about a transaction, that he made from his electrum wallet to another wallet and has been waiting for hours for it to go.

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

What determines speed of transactions?

I want to learn.

If you want to learn a lot of things, try reading more about the things you need right now. And the simple answer to your question is Transaction speed can be affected by several factors, including block time, block size, transaction fees, and network traffic. That's what I found on statista.com which explains the transaction speed rating of 69 crypto - including DeFi and metaverse - in 2022. So try to check some of the factors that are in the transaction made by your friend and stop complaining because complaining is not a solution wise matter.

[Outhue]

If you are impatient when you want to send bitcoin from one wallet to another just add more to the gas fee, not all wallets support this but there are some that do, the higher the gas fee the faster the transaction speed, there are also other factors affecting this too, like miners and block, etc.  

On crypto exchanges, you have no choice but to go ahead with the fixed withdrawal fee, that's why I always check gas fee comparisons on exchanges, some have higher fees and some have a lower fees just like Binance exchange vs Huobi exchange.

[NeuroticFish]

gas fee

Bitcoin doesn't have gas fee. Bitcoin has transaction fee.

Ethereum and its tokens use gas fee and that's not OP problem.
Even more, if you start confusing people they may end up using wrapped bitcoins on other chains, and that's risky since those are only tokens borrowing bitcoin name (and claiming to be pegged to it's value).

So.. let's stick with the original bitcoin, OK?

[hosseinimr93]

They (same fee-rated transactions) won't be confirmed based on "first comes, first serves" in mempools.

Are you sure of that?
I am not sure, but I don't think all miners/mining pools use the same criteria for how to prioritize transactions having the same fee rate. I think every miner/mining pool should have their own criteria.

[UchihaSarada]

They (same fee-rated transactions) won't be confirmed based on "first comes, first serves" in mempools.

Are you sure of that?
I am not sure, but I don't think all miners/mining pools use the same criteria for how to prioritize transactions having the same fee rate. I think every miner/mining pool should have their own criteria.

I am not sure.

Mining pools and miners can include their own transactions with low fee rate in the block they successfully mine. For transactions that are not theirs, they will have different criteria for priority that is combination of fee rate and UTXO age.

Mining and consensus in Mastering Bitcoin.

Transaction Age, Fees, and Priority

To construct the candidate block, Jing’s bitcoin node selects transactions from the memory pool by applying a priority metric to each transaction and adding the highest priority transactions first. Transactions are prioritized based on the “age” of the UTXO that is being spent in their inputs, allowing for old and high-value inputs to be prioritized over newer and smaller inputs. Prioritized transactions can be sent without any fees, if there is enough space in the block.

The priority of a transaction is calculated as the sum of the value and age of the inputs divided by the total size of the transaction:

Code:

Priority = Sum (Value of input * Input Age) / Transaction Size

In this equation, the value of an input is measured in the base unit, satoshis (1/100m of a bitcoin). The age of a UTXO is the number of blocks that have elapsed since the UTXO was recorded on the blockchain, measuring how many blocks “deep” into the blockchain it is. The size of the transaction is measured in bytes.

Another answer: How do miners choose transactions

Let me walk you through the lifecycle of a transaction, and I think it'll become clearer.

A sender submits their transaction to the network. Every node checks whether the transaction is spending existing funds and whether it is otherwise valid. If so, they relay the transaction to their peers. This way, transactions disseminate to all participants in the network.

Some of the network participants, miners, continuously attempt to author new blocks. They assemble a block from the valid unconfirmed transactions they receive from their peers. They can choose any subset of the transactions they know about, but generally choose the transactions with the highest feerates to maximize their block reward. They could for example also prefer to include their own transactions, not include any transactions, or instead pick transaction by any other pattern (e.g. oldest first?)—this happens in traces, but usually reduces the revenue of miners, so works against their interests.

Using their draft for the next block, their block template, they repeatedly slightly change a field that takes a random input, the nonce, to see whether they can find a valid block using their template. When a miner exhausts the nonce space, they mix up the template in a different manner.

Once a miner discovers a block template for which the hash is below the difficulty target, they broadcast the new block to the network, extending the blockchain. All the transactions in the block are considered to have gotten their first confirmation and are now part of the blockchain. The successful author of the block pays the block reward out to themselves in the so-called coinbase transaction, the first transaction in the block. The reward can be spent when it has 100 confirmations.

[o_e_l_e_o]

Transaction priority based on size and age of inputs was only relevant when the majority of transactions did not pay fees. This is no longer the case, and so age of inputs is no longer relevant.

If you have two transactions of different sizes which pay the same fee rate, then the miner is going to pick the one which maximizes their rewards. For example, if there is 1000 vbytes of space left in the block, and there are two transactions of size 900 vbytes and 1000 vbytes respectively both paying 10 sats/vbyte, then the miner will pick the larger of the two transactions, since they can't do anything with the 100 vbytes of space which would be left over by picking the smaller. If, however, there were three transactions of sizes 400 vbytes, 600 vbytes, and 800 bytes (again all paying the same fee rate), then the miner will pick the two smaller ones to most efficiently fill the available space.

[bitmover]

They (same fee-rated transactions) won't be confirmed based on "first comes, first serves" in mempools.

Are you sure of that?
I am not sure, but I don't think all miners/mining pools use the same criteria for how to prioritize transactions having the same fee rate. I think every miner/mining pool should have their own criteria.

The point is that there is no such thing as "the mempool".

Each node has its own mempool, based on the information they received from other nodes.

A transaction may have come first to one node and later on to other mempool.

Two transactions with same fee rate but with different transaction sizes will have different priority from miners.

You are completely wrong.
Miners prioritize transactions based on their fee rate (the fee paid for 1 virtual byte of data) and it's possible that a transaction paying lower absolute fee has higher priority than a transaction paying higher absolute fee.

hosseinimr93  is correct. What really matter is the fee rate. How much you are paying for each byte of your transaction, no matter how big/small it is.

[cydrix]

Am I missing something, is the movement of bitcoin from one exchange to another faster that moving bitcoins from one wallet like electrum to another?

The speed by which bitcoins are transferred can vary depending on factors such as transaction fees, network congestion, and the processing time of the exchange or wallet service. Moving bitcoins from one exchange to another is generally faster, but transferring between wallets can also be relatively quick if the transaction fee is high enough and the network is not congested.

[pooya87]

Mining pools and miners can include their own transactions with low fee rate in the block they successfully mine.

Actually they pay 0 fee for such transactions because anything else is like putting their money from one pocket to another. This is why even today we see transactions with 0 fee appear on the blockchain regularly (6 today, 4 yesterday and so on):
https://blockchair.com/bitcoin/transactions?s=time(desc)&q=fee_usd(0),is_coinbase(false)#f=hash,block_id,time,fee,fee_usd,is_coinbase

[hosseinimr93]

Moving bitcoins from one exchange to another is generally faster, but transferring between wallets can also be relatively quick if the transaction fee is high enough and the network is not congested.

As exchanges usually set the fee rate high enough, transactions made from exchanges are usually confirmed fast. But generally speaking, there is no difference between a transaction made from an exchange and a transaction made from a wallet. Also note that it doesn't matter where you send the fund to at all.

[UchihaSarada]

Actually they pay 0 fee for such transactions because anything else is like putting their money from one pocket to another. This is why even today we see transactions with 0 fee appear on the blockchain regularly (6 today, 4 yesterday and so on):
https://blockchair.com/bitcoin/transactions?s=time(desc)&q=fee_usd(0),is_coinbase(false)#f=hash,block_id,time,fee,fee_usd,is_coinbase

Do they have to prepare those transaction information before they find a block and how they can broadcast it instantly to a block they find?

In a block, transactions include Coinbase transactions and non Coinbase transactions but how mining pool/ miner can include their transaction in a block they find, could you explain the process, please?

[hosseinimr93]

Do they have to prepare those transaction information before they find a block and how they can broadcast it instantly to a block they find?

They simply make a transaction with zero fee and keep it until they find a block and include the transaction.

In a block, transactions include Coinbase transactions and non Coinbase transactions but how mining pool/ miner can include their transaction in a block they find, could you explain the process, please?

Miners are free to include any transaction they want and there is nothing prevent them from including their own transactions.

[o_e_l_e_o]

Do they have to prepare those transaction information before they find a block

Yes.

and how they can broadcast it instantly to a block they find?

You sound confused about how blocks are constructed.

When you broadcast a transaction to a node, the node verifies it, adds it to its mempool of unconfirmed transactions, and broadcasts it to other nodes. The other nodes repeat this process, until your transaction has spread throughout the network and most/all nodes have it in their individual mempools. A miner who is trying to mine the next block will pull a selection of transactions from the mempool of their node(s). They will organize these transactions in to a block, which is called a candidate block. Then they will attempt to mine this candidate block by constantly incrementing the nonce and extraNonce fields and checking whether the resulting hash meets the target or not.

So, before mining a block, a miner has already constructed the block they are trying to mine, which includes all the transaction inside it. If they are successful in finding a solution, they cannot change any of the transactions inside the block, or else that will invalidate their solution and they will be back at square one. It's not a case of mining a block and then "instantly broadcasting" transactions to that block, as you suggest, but rather constructing the block in advance, and then attempting to mine it.

And so it is easy to see how they can include their own transaction in a block. When pulling a selection of transactions from the mempool to build their candidate block, they can easily just add in one or more of their own transactions. Once they've built the candidate block, they'll attempt to mine it, and if successful, it will include their own transactions.

[Jon_Hodl]

First of all, I'm sorry to hear that your friend is dealing with the frustration of a pending transaction. I think we have all been there and have had to deal with the learning curve of transaction fees. Luckily for both you and your friend, there are more wallets and tools than ever before so it's easier than ever to bump the fee.

When bitcoiners say that transactions are incredibly fast is because when a transaction receives a confirmation and is aded to the blockchain, it is considered sent much faster than waiting days for fiat payments to clear. When you use a credit/debit card to pay for something in the fiat world, it actually takes days to fully settle between banks. Bitcoin transactions take 10 minutes on average. 

That being said, the way that transaction fees work is that you pay a miner fee to incentivize a miner to add the transaction to the blockchain. The higher the fee, the sooner the transaction will be added to the blockchain.

If your friend sent a transaction and it is stuck "pending", it means that it is in the mempool and is waiting for a miner to add it to the blockchain. Currently, the mempool is bloated with transactions waiting so higher fee txs are being added before your friend's txn.

Depending on what wallet he is using, you can use one of the fee bumping methods (https://www.whatisbitcoin.com/learn/what-is-fee-bumping )available to increase the fee.

In the future, your friend (and you) can check the mempool (https://mempool.space) and make sure that he pays a high enough feerate before he broadcasts the transaction. 

I hope all of that makes sense. Let me know if you have any other questions.