When you send any amount of Bitcoin over the blockchain, there is a process of verification that has to be completed by miners in order for your coins to be safely and securely transferred. This system is how Bitcoin has managed to stay secure and anonymous for the past 12 years. Generally, as a user, you don’t need to know the technical details of the blockchain, but it can help you to stay safe in such an unregulated space. How do Bitcoin confirmations fit in the bigger picture here?
First things first, here is a brief introduction to the blockchain:
When you transfer Bitcoins to another wallet address, your transaction is never immediately verified. First, it goes into a place called the mempool, where it needs to wait to be picked up by a miner for verification. When a miner (computer) picks up your transaction, it first checks if your details are valid, and adds it to its block of data. This data is called a block. The miner then needs to guess solve a mathematical problem to verify the block and place it into the Bitcoin ledger of transactions. We know this ledger as the blockchain.
Looking for a reliable Bitcoin wallet? Check out our Bitcoin.com wallet review!
There are many miners in competition to verify a block, in order for the transaction fee reward attached. Transactions with higher fees will be picked up first by miners, as the reward is higher when a block is solved.
Overview On Bitcoin Confirmations
Here is a nice explanatory video on Bitcoin confirmations!
Now that you know the basics of the blockchain, I can introduce you to confirmations. Confirmations are especially important to keep track of if you are the one receiving Bitcoin, but are also important if you are sending.
You might be asking yourself, how many confirmations does a bitcoin transaction need? Or, how does a single transaction receive multiple confirmations? Read on to find out!
When a block has been inserted into the blockchain by a miner, it receives one confirmation, as well as rewarding a confirmation to all the previous blocks in the chain. When a transaction gets six confirmations, it is considered irreversible. This usually takes around 1 hour.
How Many Confirmations Does A Bitcoin Transaction Need?
Confirmations are a significant factor that makes Bitcoin so secure, especially for the party receiving the transaction. As a rule, it is commonplace for a transaction to be completely irreversible once it gets six confirmations, however for smaller values, this isn’t always true.
For example, for transactions under $1000, one transaction will usually do the trick, and if you are making a transaction between $1000 and $10,000, then 3 is the standard requirement for most exchanges. High values like $10,000 and up will need 6 to be safe. If you are working with a massive amount of Bitcoin worth hundreds of thousands or millions of dollars, then many experts suggest up to 60 confirmations to be entirely sure your transaction won’t be reversed.
Want to make a profit with Bitcoin? Check out how to get the best Bitcoin deals!
But why do lower values require fewer transactions? Well, if you are a service or product provider on a time limit, and can’t wait a full hour for six confirmations, then one will usually suffice. This is because reversing a transaction needs an attacker to create a new block as well as a longer blockchain than the original. This requires a very high level of computing power, which isn’t worth it for smaller transactions. The possibility of a transaction being reversed at this point is still possible, but highly unlikely.
How Long Will I Have To Wait For Bitcoin Confirmations?
One of the biggest flaws in the Bitcoin blockchain system is the sheer amount of time it takes for a transaction to be verified by miners. This is due to the number of transactions that need to be confirmed, along with the limited block size. Though there has been much debate and even a vote over increasing the block size, it doesn’t seem to be likely to increase anytime soon.
Want to learn how to earn money by lending Bitcoin?
Because of this, it takes around 10 minutes for your transaction to receive one confirmation, and can take up to an hour to receive 6. This can deviate, give or take minutes or hours. This is a big problem for the scalability of Bitcoin, making it highly impractical for small everyday purchases.
How To Check Bitcoin Confirmations?
It’s easy to track the details of your transaction with the transaction ID you are provided when you make a transaction. All you need to do is go to a block explorer like Blockchain.com and enter your ID; there you can see how many confirmations you have on your transaction.
When you make a Bitcoin transaction, you need your transaction to be added to a block, which will then be true to the Bitcoin ledger (blockchain). When your block is added to the blockchain, your transaction will receive one confirmation. Each time a new block is added after yours, you will receive a new confirmation. Therefore, the number of blocks present after and including yours is equal to the number of confirmations your transaction will have.
Confirmations are especially important to the receiver of a transaction, as they can help guarantee that an attacker cannot reverse a transaction. Generally, it is agreed that six transactions are enough to solidify it. However, with smaller and larger amounts, more or fewer confirmations are needed. This is due to the incredible amount of computing power reversing a transaction requires, making smaller amounts not worth an attacker’s time or effort.
So, how many confirmations does a Bitcoin transaction need?
Lower than $1000: 1 confirmation should suffice
Between $1000 and $10,000: around 3 confirmations should deem it irreversible.
Above $10,000: 6 confirmations are the minimum requirement
$1 million range: some experts advise up to 60 confirmations to be safe.
Though Bitcoin is a great way to transfer funds securely and anonymously, you need to remember that it is a fairly unregulated environment, so keeping yourself and your transactions safe is important. Hopefully, this article has helped you understand more about Bitcoin confirmations.