On the cryptocurrency market, there are over 7,000 digital currencies such as Ethereum (ETH), Bitcoin (BTC), Litecoin (LTC), Monero (XMR), Ripple (XRP), Bitcoin Cash (BCH), Cardano (ADA), EOS, Zcash (ZEC), and many others.
Next to Bitcoin, Ethereum is the second most popular digital currency. However, unlike Bitcoin and other altcoins, Ethereum has been designed as more than just a store of value or a medium of exchange. The Ethereum network is a decentralized and open-source computing network and operating system used for creating smart contracts and decentralized applications.
In this article, we’ll explain to you how Ethereum works and how the confirmation is done. After we finish explaining this, we’ll be able to give you the number of confirmations you need for Ethereum.
How Does Ethereum Work?
Same as Bitcoin and other digital currencies, Ethereum works on a blockchain network basis. A blockchain is a distributed, decentralized public ledger on which all the cryptocurrency transactions are recorded and confirmed.
The term distributed means that anyone that participates in the Ethereum network has an equivalent copy of the public ledger, which allows the participants to have an insight into all previous transactions. The Ethereum network is decentralized due to the fact that it’s maintained and operated by all the holders of the distributed ledger and not by any centralized authority.
Moreover, this network is secure because its participants use complex cryptography to verify and confirm the transactions. Ethereum is unique because its users can develop apps that run on the Ethereum blockchain, just like software runs on our computers. These applications allow users to deal with complex financial transactions or transfer and store personal data.
How Does Ethereum Confirm Transactions
Every Ethereum transaction contains the wallet address of the receiver, the amount of Ethereum that will be transferred, the private key to authenticate the transaction, and the transaction fee that the sender will pay (called a gas fee).
Similar to how the Bitcoin network works, the Ethereum network also consists of miners who confirm the transactions and select the one with the highest fee first.
This means that if the amount of gas is larger, the miners will put this transaction on the blockchain as a priority and the approval time will be shorter. On the other hand, lower gas leads to more time for transaction confirmation. The overview of the gas usage can be seen on ETH Gas Station, and the number of the transactions that are pending is available on Etherscan.
Once you send the transaction, the coins won’t be added to the block right away. Instead, they’ll be redirected to the transaction pool, a place where all unconfirmed transactions end up. The Ethereum miners pick up a transaction from this pool, authenticate the particular transaction, and create a block. Afterward, in order to add the new block to the blockchain, the miners have to solve complex math equations. When the miners resolve these math equations, the new block gets confirmed and attached to the blockchain.
The number of transactions that the miners can incorporate in the blockchain is limited, due to the blockchain gas limit. Therefore, the Ethereum network can process limited blockchain transactions.
After the miners attach a new block on the blockchain they can collect their reward in cryptocurrency tokens. The tokens that are used on the Ethereum network are known as Ether. With these tokens, you can sell and buy goods and services.
How Many Confirmations for ETH?
The number of Ethereum blockchain confirmations appears to be undecided. The Ethereum white paper suggests that seven confirmations can be sufficient in order for one transaction to be confirmed, which should take about two minutes.
However, Ethereum transactions are usually made through cryptocurrency exchanges, and the number of confirmations that are needed depends on the cryptocurrency exchange that you are using. In other words, each cryptocurrency exchange decides about the number of confirmations for Ethereum. This isn’t the case only with Ethereum, it’s the same for Bitcoin, Litecoin, ZEC, Monero, BCH, EOS, ADA, and other cryptocurrencies.
Let’s take a look at the most popular cryptocurrency exchanges and the number of confirmations they require.
Coinbase supports over 50 cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, and Dogecoin. For every one of these cryptocurrencies, Coinbase has a required number of confirmations:
- Ethereum – Coinbase requires 35 confirmations, which takes around ten minutes;
- Bitcoin – Coinbase requires 3 confirmations, completed in 30 minutes;
- Litecoin – 12 confirmations in 30 minutes;
- EOS – it requires only one confirmation which takes only one minute.
Binance also supports over 50 cryptocurrencies, and it’s well known for having some of the lowest transaction fees. Here are the number of confirmations that Binance requires:
- Ethereum – Binance requires 12 confirmations processed in under 10 minutes;
- Bitcoin – it requires only one confirmation, which takes approximately 10 minutes.
- Ethereum – Kraken needs 20 confirmation and manages to process them in five minutes;
- Bitcoin – it needs 4 confirmations that take 40 minutes;
- Litecoin – it needs 12 confirmations, and it takes 30 minutes;
- EOS – it doesn’t need any confirmation, meaning it’s nearly instant.
A Few Words Before You Go…
Our team hopes that we’ve managed to introduce you to the Ethereum cryptocurrency and how its decentralized network works. You’ve also learned that the number of confirmations for Ethereum transactions largely depends on the cryptocurrency exchange you’re using, which is why you should always opt for a platform with high transaction throughput like the ones suggested here.