When talking about cryptocurrency, Bitcoin (BTC) is definitely the first crypto that comes to mind since it’s the original and most popular digital currency to date. However, as these assets entered the mainstream in recent years, Ethereum (ETH), the second most popular crypto, is also becoming a household name. This hardly comes as a surprise when you consider the fact that Bitcoin and Ethereum make up more than half of the total cryptocurrency market cap and enjoy the highest daily trading volumes on the popular crypto exchange platforms.
The key difference between the BTC and ETH blockchain is the fact that Bitcoin is mainly used as decentralized digital cash, while ETH is used both as a financial asset and an ecosystem for dApps, DeFi and other open-source projects. This requires a tremendous amount of Ethereum transactions to be processed daily because all apps and platforms built on the Ethereum network are powered by ETH and incur GAS fees. But how long does it actually take to send Ethereum across the network?
The Ethereum Blockchain
Ethereum was launched back in 2015 by crypto enthusiast Vitalik Buterin as a non-profit, open-source blockchain network to provide developers with resources for launching apps, tokens and online platforms without having to rely on centralized platforms run by big data companies. This is all possible thanks to Ethereum’s smart contracts, self-executing agreements created by programing code sequences in order to automate various aspects of business operations.
The Ethereum ecosystem uses the Solidity programing language and the Ethereum Virtual Machine (EVM) that enable developers to create and launch their smart contract-powered decentralized apps on the ETH blockchain. Since the launch of Ethereum, developers have built over a thousand different dApps, ranging from decentralized exchanges (DEXs), lending platforms, staking pools, games, online service apps for booking travel arrangements, all the way to NFT marketplaces and crypto wallets. Ether powers all these apps, and they all depend on ETH blockchain transactions to operate.
Apart from smart contracts and dApps, a huge portion of the Ethereum ecosystem consists of ETH based tokens. Any developer team that knows how to use Solidity and other ETH programming resources can launch its own cryptocurrency on the ETH blockchain. This is a very handy feature because it’s quite complicated and expensive to create and run your own blockchain. With Ethereum, developers can launch their crypto token if they simply adhere to a selection of standardised rules, known as token standards.
The ERC20 token standard is the most popular set of rules for ETH tokens, and many high-cap cryptos are actually ERC20 tokens, including Chainlink (LINK), OmiseGO (OMG), Shiba Inu (SHIB), Dai (DAI), Basic Attention Token (BAT), Maker (MKR), Gala (GALA), Olympus (OHM) and thousands of other cryptos.
Ethereum (ETH) Transactions
The Ethereum ecosystem is one of the largest networks on the crypto market, and it constantly has huge levels of network traffic. When ETH was first launched, the developing team had no clue that it would become so popular, which led to scalability issues after a few years. The ETH blockchain is currently based on a Proof of Work consensus mechanism, but there are plans in motion to migrate the whole network to Ethereum 2.0, which is based on a Proof of Stake mechanism.
Ethereum transactions currently work very similarly to BTC transfers. When a user initiates a transaction, their transfer – which contains information about the amount of sent assets, the destination address, the sender’s address, the transaction ID and the timestamp – goes into the memory pool. The memory pool is a place where transfers wait for an Ethereum miner to pick them up for processing based on the included GAS fee.
Once a miner chooses a particular transaction, they use the computing power of their mining rig to search for the appropriate transaction hash. While Bitcoin uses the SHA256 algorithm, Ethereum uses the Keccak-256 hashing algorithm. When a miner manages to find the appropriate hash, they present it as proof of work to the rest of the Ethereum network. After the transfer receives enough confirmations from independent network nodes, it is approved and added to the blockchain.
Generally, an Ethereum or ERC20 token transaction can take anywhere between 15 seconds and 5 minutes, but the transfer confirmation time can also be considerably longer in cases of high network traffic. The transaction time is roughly the same no matter whether you’re buying Ether with USD or other fiat currency through a debit card, credit card, or exchanging another crypto for ETH. However, if you’re purchasing ETH through a bank account transfer, your ETH might arrive in several business days because of the slow bank transfer approval procedures.
The number of confirmations can also vary because some exchange platforms require up to 50 confirmations to consider an ETH transaction finished, while other platforms and wallets accept an ETH transfer that has only several confirmations.
GAS fees are an important part that accompanies every Ethereum transaction. Just like Bitcoin transfers have transaction fees, all ETH transfers have GAS fees paid in Ether. The higher the GAS fee, the quicker your transaction will get picked by miners and processed to its destination address. Miners are known to select transactions with higher GAS fees because once they validate the transaction, they get to keep the GAS fee as a reward for their work.
Although you can set your GAS fee manually, it’s highly advised to check the average Ethereum GAS prices at the moment to include a solid fee that will ensure your transaction gets processed in under 5 minutes. You can check the current GAS prices and GAS limits for low speed, standard and fast ETH transactions on the ETH Gas Station.
If you’re setting your GAS price manually, it’s best to stick with a standard speed fee, unless you’re in a hurry and want to get your transfer processed in less than a minute. In that case, you might be required to pay a pretty high fee. Due to high network traffic, Ethereum fees have sky-rocketed and it’s quite common for GAS fees to be a considerable percentage of your total transaction. That’s why many developer teams are shifting to cheaper blockchains such as the Avalanche (AVAX), Binance Smart Chain (BSC) and Polygon (MATIC) blockchains.
Ethereum VS Bitcoin Crypto Transaction Time
Crypto beginners often wonder whether it’s faster to initiate a BTC transfer or an ETH transaction. There’s no clear answer. Generally, the ETH transaction time of 15 seconds to 5 minutes is much faster than Bitcoin’s 5 to 10 minutes, but in times of high network congestion, these rules are no guarantee. The only thing you can rely on is sending a transaction with higher fee, as it will definitely get validated faster. Sometimes both BTC and ETH transfers from one wallet address to another take much longer than the average transfer time.
Why are GAS prices high sometimes?
GAS prices fluctuate based on Ethereum volatility and network traffic. If the ETH price goes up, then logically, the GAS fees will also cost more fiat money. Additionally, fees are known to dramatically jump in times of high network traffic when the mempool is jam-packed with pending transactions, and everyone is just trying to outbid each other with a higher GAS price.
How long does it take to send an ETH-based NFT?
Since a large portion of the NFT market is based on the ETH blockchain, people often wonder about the exact time it takes to send an NFT through the network. Generally, an NFT you just bought should appear in your Ethereum account anywhere between 15 seconds and 5 minutes, just like a regular ETH transfer.
What is the cause behind slow ETH transactions?
There are two possible causes for slow ETH transactions. You’ve either included a below average GAS price, or the network is jammed and only transactions with extremely high GAS fees are getting processed. This is why you should always include at least an average GAS fee.
A Few Ending Words…
The often high transaction fees on the Ethereum blockchain might be a dealbreaker if you’re looking to transfer modest amounts of ETH based tokens. Unfortunately, if you’re an active trader who heavily relies on trending ERC20 tokens, you need to prepare yourself for the fees as there’s no way around them when using the ETH blockchain. On the other hand, paying an average or above-average fee is a great guarantee that the miners will prioritise your transaction and pick it up from the mempool.