Time is money, so they say. And in the crypto community, transaction speed is one of the main metrics we look at when analyzing a coin, token, or another type of digital asset.
If you’re brand new to the crypto scene, you’re probably wondering just how fast a transaction takes to complete from start to finish. It’s an important question and one that sometimes gets overlooked by newcomers.
That’s why we’re examining this topic from top to bottom, starting with Bitcoin and looking at some other crypto competitors along the way.
You’ll learn about the factors that play into cryptocurrency transaction times, how technology is developing to improve the user experience, and what this means for the industry as it evolves and expands. Let’s get to it.
Why Transaction Speeds Matter When Sending Cryptocurrency
Average transaction speed (ATS) is a top priority when assessing a cryptocurrency’s quality and potential, especially when looking at brand-new assets.
Here’s why ATS is such a big deal and why it needs to be a part of your analysis equation when looking at Bitcoin and any other crypto.
Value and Convenience
Think of any purchase you make in life, whether it’s a computer, a vehicle, a wristwatch, or anything else. You want that item to work – and work exceptionally well no matter the conditions.
TPS is a metric that truly tests the capacity of a blockchain network by gauging just how quickly a transaction can happen on a network after an order has been placed.
Whether you’re sending Bitcoin or receiving it, you want to make sure your currency gets to the place it needs to be. That could be your digital wallet, a centralized exchange, a DeFi application, or any number of other intended locations.
After all, this is one of the main points of value for a cryptocurrency in the first place – accurate and reliable transactions that happen more quickly than standard financial transactions.
Furthermore, transaction speeds indicate the practical function of a blockchain and indicate that it can take on more stress and pressure as buy-in ramps up.
Many of today’s top blockchains are still relatively new, and it’s difficult to gauge how well they will be able to take on a wider user base and more network applications.
ATS and transactions per second (TPS) are both metrics to keep in mind when examining a blockchain, new or old, as congestion on these blockchains will likely only increase.
Adoption and Acceptance
You only need to scroll for a few seconds to see that competition in the crypto space is extreme, with thousands of different coins and tokens striving to gain market share and rise to the top of the world’s most popular exchanges.
It’s truly a free market in this sense, and crypto developers need every advantage they can get to earn the support and take their projects to the next level.
This requires the adoption and acceptance of an asset as something practical, usable, and widely applicable.
Transaction speed is one of many factors that matter in the adoption cycle of a cryptocurrency, but it’s crucial nonetheless. After all, who wants to deal with a currency that takes forever to send or receive or isn’t reliable when you need it most?
When browsing new crypto assets on your favorite app or blog, consider how transaction speeds play into your trading decisions and your overall investment game plan.
Sending and Receiving Bitcoin
You now recognize the importance of metrics like ATS and TPS when looking at cryptos across the marketplace, but let’s get into specifics.
Starting with Bitcoin, we’ll discuss the most vital transaction metrics you should know about, then compare it to a few other cryptos in terms of pure performance.
Key Transaction Metrics
The average transaction time for sending or receiving Bitcoin is approximately 10 minutes. However, this data may be misleading because transaction speeds can vary greatly depending on how much Bitcoin is being sent on the blockchain at a given time.
For example, the ATS on November 6, 2021, was just over 8 minutes, perhaps because it was a slow trading day without much breaking news. But three days later, on November 9, the ATS skyrocketed to over 85, as the blockchain was heavily congested and moving more slowly.
In terms of TPS, network load also makes a difference, although the average throughput is around 9 TPS, according to the Bitcoin community.
That may not seem like much, especially when you consider that payment processors like Visa can handle more than 20,000 TPS.
However, the direct and decentralized nature of Bitcoin more than makes up for this performance downside, and there are solutions like the Lightning Network that drastically accelerate these processes.
Other Top Crypto Speeds
Curious how Bitcoin stacks up against other top-tier cryptocurrencies in terms of transaction speed and network capacity?
Here are a few of your favorite altcoins and some interesting metrics to consider.
- Ethereum
ATS: 6 Minutes
TPS: 25 - Litecoin
ATS: 30 Minutes
TPS: 56 - Monero
ATS: 30 Minutes
TPS: 4 - Dogecoin
ATS: 6 Minutes
TPS: 33 - Cardano
ATS: 10 Minutes
TPS: 250 - Ripple
ATS: 4 seconds
TPS: 1500
As you can see, transaction time doesn’t necessarily correlate to the price or the popularity of a coin – so much else comes into play.
There are certainly cryptos that can’t keep pace and are considered too slow or technologically outdated in terms of speed, and they typically never get off the ground.
But as we’ve learned, transaction speeds are only one aspect of the user experience and we need to take a more holistic approach to analyze cryptos from every angle.
How Are You Using Crypto in 2021?
People use cryptocurrency in countless different ways for various purposes. Sending and receiving Bitcoin or other assets may not be your top priority, and that’s okay.
A better question to ask is this: What do you want out of your crypto experience, and what is the smartest, most efficient way to achieve that?
If you start here, you will find your crypto journey to be far more satisfying and profitable. Focus on clarity and consider the various ways in which crypto can add to your life.
Long-Term Holding and Investing
You see crypto as a hedge against inflation or market insecurity, like so many retail investors in this current environment. Perhaps you’re even interested in Blockchain ETFs that don’t even have direct exposure to cryptocurrencies themselves.
Transaction speed won’t matter much to you, considering you don’t get hands-on with crypto on a daily basis.
Trading, DeFi, and Other Apps
You constantly send and receive Bitcoin (and other tokens and coins) across the network and make rapid-fire decisions with major consequences.
Transaction speeds are certainly more important to you in your everyday operations, but again, they’re not everything. More relevant to you is how certain assets are performing and how well you can utilize the technologies at your fingertips – including exchanges and apps.
Remember that nearly everyone is working with the same technology when it comes to investing or trading. Nobody has a crystal ball or time machine, either!
What matters more in the crypto trading game is your understanding of that tech and the skills you develop relative to your tool kit. Transaction times, fees, and other obstacles are just part of the deal, and everyone contends with them.
Mining Crypto
Mining Bitcoin and other cryptos is still a hugely popular and profitable angle for many investors, and these practices aren’t going away anytime soon.
Not only are companies funneling more resources into crypto mining operations, but they’re also searching for ways to streamline these technologies and use renewable resources to clear more profits and create a green standard for crypto, once and for all.
Use Bitcoin and Crypto Your Way
The big takeaway here is to understand – but not to get hung up on – things like transaction speeds, transactions per minute, or other metrics like this.
You choose your plan of attack when it comes to crypto, so keep testing new angles and always accumulate more knowledge as you explore this limitless frontier.
Sources:
How Long it Takes to Send Bitcoin | Scholarly OA
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