Ether (ETH), the Ethereum network-based cryptocurrency is one of the most popular digital assets today, alongside Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), and Ripple (XRP).
Ethereum works as a fully decentralized software platform, with the aim of providing users around the world with a diverse choice of financial products and services such as smart contracts and decentralized applications (dApps). In doing this, the network uses the Ether crypto token to facilitate transactions and cover the so-called gas price, i.e. the transaction fee for these decentralized services on the Ethereum blockchain.
Let’s take a look at how transferring cryptocurrencies works for this type of transactions and how long it takes to transfer ETH and Ethereum-based assets like ERC20 tokens.
The Process of Transferring Cryptocurrency
If you want to store your ETH and use them for trading on cryptocurrency exchange websites such as Binance or Coinbase, you need to have an Ethereum wallet. After you have chosen one, like MetaMask for example, you are ready to start transferring assets.
The Ethereum blockchain consists of nodes, a term used for the software on the computers of Ethereum miners. Each miner is called a client in the Ethereum network, and every client operates a node of the blockchain. In order for a cryptocurrency transaction to take place, the nodes are required to verify the validity of the transfer and to broadcast the currency to its destination.
Also, miners are responsible for grouping the transactions into blocks of data on the blockchain.
This is why the transfer of your digital assets isn’t instantaneous. Each cryptocurrency blockchain has fluctuations of traffic and it’s rather difficult to say exactly how much time it will take for a transaction to be confirmed as finished.
Factors That Influence Cryptocurrency Transfer Time
The two main factors that influence asset transfer time are the blockchain fee and the blockchain busyness for the currency you’re transferring.
For instance, if there’s a large number of transactions being carried out at the same time, or if there’s a lot of pending transactions waiting to be processed, then the transaction will take longer. This also depends on the transaction fee you are willing to pay. If you’re prepared to pay a higher transaction fee, you won’t need to wait for that many blocks to get mined. If you don’t want to pay a higher fee, then you simply have to let the blockchain process your transaction at the standard pace, depending on the current network load.
Blockchain transfer fees are small portions of your transferred assets, necessary to pay miners in order to confirm your transaction. When it comes to Ethereum, this fee is called a gas fee. Essentially, gas is the fuel of ETH transfers and the price of the fee is listed in gwei, which is the smallest base unit of Ether. The gas fee fluctuates on a daily basis, depending on network busyness and the number of active Ethereum miners, so it’s best to use a calculator such as ETH Gas Station in order to get the numbers right.
If miners see that your transaction comes with a below-average gas fee, then they might choose to ignore it and prioritize other transactions with average or even higher fees.
When exchanging cryptocurrency for fiat currency, transferring the assets to a bank account can take up to several days, since you first have to transfer the funds to a crypto exchange site and then to your bank account. Some banks take up to five days to process such a transaction.
Also, the transaction time depends on the type of exchange or payment provider you’re using. If you transfer your funds via a service such as Wirex or Kraken, your transfer will be faster as these services optimize the transaction fee in order to achieve greater speed.
Differences in Crypto Transfer Time: Bitcoin (BTC) vs. Ethereum (ETH)
Let’s see the differences in the average estimated time for Bitcoin and Ethereum transactions. Both currencies require a transaction to be confirmed several times before the final approval.
A BTC transfer needs at least 3 confirmations on the Bitcoin network for the transaction to go through. If you pay a higher fee, your transaction can be finished with the use of fever blocks on the blockchain, which means less time. On average, based on the usual activity of Bitcoin miners on the network, one transaction takes about 10 minutes
When transferring Ethereum-based assets, the transaction will be processed after it gets 12 confirmations on the Ethereum blockchain. This can take approximately 5 minutes. With ETH, it’s good to know that when you send multiple transactions, they can only be completed in the order in which you sent them. If you pay a higher transaction fee for the second batch of assets, it still can’t be transferred before the first one.
A Few Words Before You Go…
As you can see, transferring any digital currency is a complex process with many factors that determine the time needed to carry out a transaction. We hope that this information will help you plan your transactions and use the right tools when transferring assets.