Bitcoin is a fantastic investment, but making sure that each transaction is legitimate and right can be difficult. When it comes to both sending and receiving bitcoin transactions, it is always best to know a bit about the process and about what to expect while you are waiting for your bitcoin transactions to be confirmed and what to expect if that confirmation does not come.
What is a Bitcoin Transaction and Confirmation?
A bitcoin transaction is a signal or message that is sent to the network to start the overall transfer process. The transaction includes the public key, the address, and the signature of the sender, the amount of bitcoin being sent and the address of the person that it is being sent to. These components are necessary to make sure that the bitcoin gets to the final place that it was intended.
Transactions are sent into a memory pool where they await their confirmation. Miners and nodes pick up on these transactions when they are sent and then confirm that the sender’s address is correct and real and that the sender has enough bitcoin to complete the transaction. After the confirmation, a timestamped block is added to the blockchain, and the transaction becomes harder and harder for hackers to alter.
Why are Confirmations Important?
The blockchain of any one transaction and its number of confirmations is essential for a few different reasons. The first confirmation is, of course, the most important as it does start the chain and build the foundation for the confirmation process.
For starters, one confirmation is great, it does start the chain, and it does get the process rolling. However, it is easier to fake that one confirmation than it is to counterfeit ten, for instance. Most vendors do require more than one, usually around three, confirmations to accept and then process the transactions. For transactions that are a greater risk, the Bitcoin community typically requires six or more confirmations. The moral of the story is, the more confirmations any one transaction has, the more secure it is, the more reliable it is, and the less likely it is that the transaction can be tampered with or changed in any manner.
What Happens to Unconfirmed Bitcoin Transactions?
A transaction can be confirmed, unconfirmed or rejected. When an unconfirmed transaction is confirmed, and a blockchain is created, the transaction becomes confirmed and moves on. When the transaction is not confirmed and is instead rejected, the transaction is denied. Rejection can occur due to a few different factors. If the sender is not a real sender, if the sender address does not have enough coins to complete the transaction, or if the recipient is found to be fraudulent, these can all lead to rejection.
So what happens to those that are merely unconfirmed? Unconfirmed transactions sit in the memory pool until they are confirmed or picked up by miners to be confirmed. For the most part, an unconfirmed status means that the transaction is waiting to be confirmed. A transaction is going to offer a transaction fee to help entice miners to pick up the order and get it moving along.
If the transaction fee is very low, the miner is less likely to pick it up and work the order. These transactions can stay in the memory pool indefinitely if they are not picked up or rejected. Unconfirmed transactions can be moved forward by the sender if they offer specific methods and incentives to miners.
Moving Unconfirmed Bitcoin Transactions
There are a few ways you can encourage these orders to be picked up. The first is replace by fee protocol. This means that in some cases, you can replace the old transaction with a wallet that has a higher transaction rate, which can encourage the transaction to be pushed through. If this is not an option, there are other methods.
Users can also create a new transaction with the same amount but can instead increase the fee, which will encourage miners to pick up the higher fee transaction. This will then cancel the first transaction and then send funds to themselves. This is an iffy method at best, but it can help you to get your funds faster.
With the child-pays-for-parent method, you can effectively send out notice of the first transaction but offer a higher fee so that miners are more likely to get the transaction and move forward. This is a great way to get your transaction moving without having to do a ton of work.
Why Worry About Confirmation?
Confirmation does help you to get your transactions moving and to make sure that your transactions are going to be approved time and time again. If you are working to make sure your confirmations come fast, you do want to take the time to offer higher fees to help entice the miners to pick them up. In most cases, confirmations only take a few days and up to a week. If you have had a transaction out longer than that and are still having trouble moving it forward, it is always going to be best to take the time to get your fees straight to help move it along.
Bitcoin is a great way to invest, and with the right fees and the right confirmation, your transactions can be approved in no time. If you are having trouble finding the suitable fees, you can always look at comparable fees for the particular transaction that you are trying to make. Since confirmations are so important, you do want to make sure you are taking the time to get those transactions confirmed and move them from the memory pool to your recipients.