Bitcoin transactions: how to check and track the status, where to see confirmed and unconfirmed transactions, how to cancel and make a payment, commissions
Bitcoin transactions are a signed piece of information transmitted to the network and included in blocks. Each of the transactions refers to the previous ones and sends a certain amount of BTC coins to the specified Bitcoin address. The broadcast of transactions to the network is performed without encryption, that is, on special resources you can see all the transfers taking place in the network. In the review, the Btcnewsweb.com editors will consider how to check, track the status, where to view confirmed and unconfirmed transactions.
- 1 What is a Bitcoin transaction and how is it processed
- 2 What does confirmed and unconfirmed transaction mean
- 3 Bitcoin transaction fees
What is a Bitcoin transaction and how is it processed
The bitcoin coins themselves, as such, do not exist anywhere – not only in real life, but even on a computer hard drive. If we say that someone has bitcoins, then we do not mean any physical or digital object.
All information about the “ownership” of bitcoins to someone is based on transactions between addresses, the result of which is an increase or decrease in the balance. In order for the information to be correct, it is necessary to reliably store information about each transaction for the entire lifetime of the cryptocurrency. This is handled by the blockchain (chain of transaction blocks). Thus, before displaying the balance of a specific address, the system calculates all incoming and outgoing transactions associated with it.
In order to send bitcoins, you need two things: a private key and a Bitcoin address. The address is generated randomly, outwardly it is just an alphanumeric sequence. The same can be said about the private key, but this information is highly classified.
Drawing an analogy with real life, you can call the address a safe with a transparent door. Everyone can come up and see what’s inside, but only the owner of the private key has the ability to open it.
Where transactions are stored
Immediately after the client creates a transaction, it is distributed across all wallets of miners / pools. Moreover, if some miner or pool tries to delete the operation, this will not affect the work of other pools, they are autonomous from each other.
Pools work as follows: after every certain period of time (depending on the settings, most often every second), they make a selection from their own mempool (queue) of transactions, form blocks from them and try to perform a mathematical calculation to close the block.
The logic by which transactions are selected or deleted from the mempool is personal for everyone. Miners, as a rule, update the wallet client in a timely manner, which makes the process dependent on the opinion of leading programmers and top pools.
If one of the pools decides to change the selection logic (for example, by increasing the commission, thereby making it uncomfortable for clients), then transactions that do not meet these requirements will be processed by the rest of the pools. In this case, the transaction is said to be stuck in the mempool and is waiting.
Even if the pool deletes the operation without saving any information about it, the bitcoin transaction can return to it again, since new clients are connected to the network, sending information to the miners again and again.
Bitcoin transaction processing speed and scalability
One of the main problems with bitcoin today is related to the scalability of the network. The reason is that the creators of the cryptocurrency initially limited the basic block structure to a size of 1 MB. The limitation is based on the peculiarities of the formation of the blockchain as a decentralized data register, due to which all participants have to constantly send each other information about each new operation. The small block size reduces the risk of a DDoS attack.
Taking into account the average statistical block generation time (10 minutes) and the average size of information about the operation, the normal speed is 3 transactions per second.
Statistics for the last month showing the daily number of transactions in the Bitcoin network:
However, the more popular Bitcoin is, the more transactions occur on the network. And because of the block size limitation, there is a queue very often. The situation became critical in mid-2017, when the waiting time for the implementation of the operation in the block reached several days.
On the Bitcoin network, the user can manually increase the fees for processing faster. Therefore, the constant occurrence of queues was reflected in the minimum amount of commissions, but delays were not eliminated. Therefore, at the moment, until the problem is solved, the cryptocurrency is not suitable for frequent microtransactions, which makes it difficult to implement in real life – for example, use in stores or cafes.
What is included in a bitcoin transaction, inputs and outputs
Each operation in the Bitcoin network consists of three types of elements:
✅ additional service information.
The purpose of the inputs is to determine from which source the funds that the sender wished to control came from. Outputs determine who gets the right to dispose of these funds. The key rule is that the sum of coins at the input cannot be less than at the output. Only greater than or equal to.
The Bitcoin protocol states that the input of one transaction is a reference to the output of one of the transactions concluded in the block formed earlier. The sender has the right to select a specific number of referrals, form a list of them and create an operation based on this data.
However, it is important that each of the links is publicly available and has not been used before. If you try to apply one reference several times, then only the very first will remain, and the rest of the miners will reset.
Outputs in a new transaction, in turn, are inputs for the next, and referrals will be made to them.
What is transaction hash (TXID, TxHash)
TxHash, or TXID, is a transaction identifier that allows you to track the status of a transaction. It is easy to recognize it – it is displayed in the Blockchain wallet in a gray field above the payment information.
Sometimes there are transactions with multiple withdrawals, when several payments are grouped at once under the same ID. This situation often occurs when transferring money from a pool or on wallets with support for the Lightning Network.
How to make a transaction and transfer bitcoins to another address
In general, the mechanism for conducting transactions is similar to that used in banks and other traditional financial structures. However, in banks for this you need to identify your identity in detail, receive and fill out a lot of documents. In the Bitcoin network, it is enough to register an anonymous wallet to start using the cryptocurrency.
Briefly about how the transaction is made:
- A user who decides to send a certain amount of crypt to a recipient signs the transaction using a private key.
- Then he sends a request to the network on behalf of his wallet.
- Computing nodes, they are also miners, after a while will enter information on the completed money transfer into the blockchain.
From that moment on, the coins will be considered as belonging to the addressee, and he will be able to dispose of them.
Let’s show with an example how bitcoins are transferred:
- Transfer of a certain amount of BTC from the LocalBitcoins exchange wallet to the receiving address. The commission cannot be changed, but it is only 0.00005 BTC or $ 0.19 at the cryptocurrency exchange rate for today (20/02/2019):
The transfer from the exchange will happen within a few minutes. The TXID will be shown in the history of the transaction, by which you can check its confirmation. At first, it has the status “Unconfirmed transaction”.
- Transfer from your BitMEX account. You need to indicate the commission, your address and the amount. Bitcoin on the trading platform has the ticker XBT. Withdrawal transactions are confirmed by exchange employees once a day:
- Transfer from desktop (local) wallet for Exodus cryptocurrencies:
What does confirmed and unconfirmed transaction mean
A transaction that is successfully included in a block is called a confirmed transaction. Accordingly, the one that is still in the queue is unconfirmed. In the Bitcoin network, miners are involved in processing transfers, and they have their own priority: the transaction with the highest commission will be added to the block the fastest. That is why, most often, transactions with a low commission “hang” in the queue for a long time.
An example of an unconfirmed Bitcoin transaction:
Example of a confirmed transaction:
How to check the status and where to track a bitcoin transaction online
You can find out the status of your transfer at any time on one of the online services. An example is blockchain.com. In the search field, you need to enter the transaction ID (TXID). As a result, the transfer path and the number of confirmations will be displayed.
If there is a blue “button” next to the operation and any number (1, 2, 3, etc.), then the payment has passed.
If you specify the bitcoin address in the browser instead of TXID, then the screen will display full information about the balance, transactions:
Transaction confirmation time, number of confirmations
The standard situation is the requirement from merchants and applications that the transaction is confirmed by the six generated blocks – this guarantees its honesty and authenticity. Based on this, confirmation takes at least 60 minutes. Some outlets reduce the number of required blocks to two, which reduces the time to 20 minutes.
Example. In the screenshot, the bitcoin transaction after 28 minutes has only one confirmation:
So, in an ideal situation, the payment is confirmed in 20-60 minutes. But the load on the network is constantly increasing. The number of transactions carried out in 10 minutes significantly exceeds the allotted block volume, hence the delays in translation. Most often, the waiting time is delayed by 5-6 hours or more. The maximum time is 72 hours, after which the transaction will be canceled.
Where to see unconfirmed Bitcoin transactions
Before making a payment, it is recommended to take a look at the mempool. From this it is possible to draw conclusions about the size of the commission – if the queue is empty, the standard commission is enough, if it is overcrowded, then it will have to be significantly overestimated. Observant users noticed that the least load on the network is when it is late night or weekend in China and other Asian countries.
The blockchain.com website displays real-time information about the current number of unconfirmed payments:
And the page blockchain.com/charts/mempool-count displays statistics for this parameter:
How to speed up or reverse a transaction and push through a frozen one
A transaction already included in the block cannot be canceled. If, due to a small commission, it cannot be confirmed, then it is required to create a new payment competing with the old one, and by overstating the commission, achieve its inclusion in the block. The first low fee transaction is canceled with a “double spend” mark. The method is called “replace by fee” or “replacement of transactions”. To implement this method, you need to mark the transaction with a special label “replacable” during the transfer. In some crypto wallets, it must be enabled in the settings.
It so happens that the payment hangs for several days without confirmation, then suddenly disappears, and the funds are returned to the balance. This does not mean that you can calm down and forget about it. In the meantime, the operation is still online and can be confirmed at any time. To do this, you need to make a “double spend”. If you want to cancel the transfer completely, you can transfer the money to yourself.
The second way to push through a pending payment is “Child Pays For Parent”. The child transaction pays for the parent.
There are accelerators for pushing a transaction:
✅ Service pool.viabtc.com/. You need to specify the TXID (transaction ID) and go through the captcha. Speed up is free, but limits can be selected. In this case, you need to register and pay for the service.
Bitcoin transaction fees
Bitcoin transfer fees are volatile, which often shocks beginners. At first, you can’t figure out by what logic transactional charges change so often and significantly. In this regard, Bitcoin even loses to banking structures in which fees are stable.
Where does transaction fees go
Commissions are used to pay for miners looking for blocks and confirming payments. The miner who found a unique block receives a reward (today it is 12.5 BTC), and additionally – commissions from all transactions included in this block.
How to determine the optimal transaction fee
The higher the commission, the faster the transaction will be confirmed by miners. To prevent users from calculating commission fees themselves, various services have been invented that automatically calculate. Often this functionality is built into crypto wallets.
For example, in the Matbi multicurrency crypto wallet, the user decides how quickly his transaction will be confirmed. If you tick the “Set high priority” box when sending bitcoins, then the transaction will be transferred to the network with a higher commission and, accordingly, it will be confirmed faster by miners.
If the wallet you are using does not have this, then you can resort to using the following resources:
- Bitcoinfees.earn.com. In the screenshot, the optimal commission value starts from 25 satoshi per byte (green zone). The estimated time for confirming a transaction in the Bitcoin network will be in the range from 0 to 55 minutes.
On cryptocurrency exchanges, commissions for input are usually absent. But there is a fee for withdrawing bitcoin that cannot be changed. Its value is indicated in the “Fee” section or when placing an order.
The site blockchain.com/charts/transaction-fees allows you to view statistics on commissions paid to miners for a specified period of time.
In the screenshot, the average fee for a Bitcoin transaction today is 29 satoshi / byte: