Crypto payment statuses review

When accepting crypto payments, it is important to know a little something about the process – so as not to worry about the timing and be cool. We have already discussed crypto transactions. Let’s take a closer look at their statuses!

Crypto payments are subject to confirmation. In Bitcoin blockchain, the time it takes to mine and adds a new block on the network is 10 minutes on average. The purpose of the block is to verify and record any new transactions that might have happened since the last block. Since the bitcoin blockchain does not approve single transactions and waits for a block of a definite size – that contains a specific number of transactions – to be mined, the time taken to approve a bitcoin transaction includes the time it takes to mine a new block. 

These days, many businesses and individual crypto-enthusiasts are accepting bitcoin as payment. As we have seen already, payment in cryptocurrency is not immediately followed by a payment confirmation notification. Having one’s bitcoin status pending or bitcoin status unconfirmed is quite a regular phenomenon.

With NOWPayments, it says “Confirming” at this point, and then you see the coveted “Confirmed” status, which means the blockchain has confirmed the transaction.

To address this issue, several blockchain explorers help to check bitcoin payment status and other types of crypto statuses. But, to know why crypto payment confirmation takes so long, we need to know the process involved in it.

The process of crypto payment status confirmation

Crypto Payment Statuses Review
Source: Hackernoon

Once you make a bitcoin transaction, the transaction is first transferred to a collection or pool of similar unconfirmed transactions. The miners active on the network pick these transactions and place them into a block of transactions. One needs to keep in mind that not all unconfirmed transactions go into one block. The block has a limited size. If the transaction volume is higher, several transactions may have to wait longer to get included in a block. Once the transaction is included in a block, the miners follow the consensus-building mechanism of that network to add that verified block on the blockchain. This is when the crypto payment can be called confirmed.

The delay is not only due to the limited size of the block but a cryptocurrency payment may also take time for some other reasons. For example, the user might not have included a large enough bitcoin miner fee or might have used a bitcoin exchange to pay. These bitcoin exchanges do not attach bitcoin miner fees. Bitcoin miner fees encourage miners to take up that transaction. 

Crypto payment statuses and facts

  • How many confirmations would it need to approve a specific crypto payment depends on what types of cryptocurrency payment solutions are used. Many bitcoin companies, for example, need multiple confirmations with the number of required confirmations going up with the amount involved in the transaction. 
  • On average, six confirmations take 60 minutes or an hour. Therefore, bitcoin status check may often become a time-consuming exercise.
  • One confirmation is enough for Bitcoin payments amounting to less than $1,000. For payments between $1,000 and $10,000, it requires 3 confirmations. An average of six confirmations is necessary for payments between $10,000 and $1,000,000. For payments of more than $1 million in size, it requires 60 confirmations on average.

Can crypto payment confirmations be faster?

Can Crypto Payment Confirmations be Faster?
Source: Bitcoinist

There are several scenarios where confirmations can happen faster. If the difficulty is set too low, block times will take time less than 10 minutes. If the network receives a lot of hashing power then mining will happen faster, at least until the next difficulty adjustment. Mining is about answering complex mathematical problems which, on average, take 10 minutes. If a miner gets to guess the answers correctly in less than 10 minutes, the confirmation would happen much faster. This phenomenon is often called a miner’s luck. Other than these scenarios and the user’s luck, there are no other ways to expedite confirmations. However, one can raise miner’s fees to get confirmed quickly.

What if the crypto payment status goes unconfirmed?

The crypto payment status may go unconfirmed for hours. The standard practice is to wait for 72 hours. If the status has been showing unconfirmed for more than 72 hours, one can re-send the transaction. As we have already discussed, crypto payments may get stuck if the miner fees are not enough. It is, therefore, recommended to use crypto wallets that include a hardware wallet. These hardware wallets help to increase the miners’ fees so that the payment gets picked up for confirmation.

The road ahead

What if Crypto Payment Status Goes Unconfirmed?

The availability of a wide range of cryptocurrency payment gateways is enabling businesses to accept crypto payments on their websites. To pay with cryptocurrency has got its own incentives for the user as well. Long waiting periods to get a transaction confirmed often work as a deterrent in making crypto-transactions more acceptable. Some blockchain networks, like Ethereum, are shifting away from their existing consensus-building mechanism to a new one to make the process faster.  With the rise in crypto payments, new technology innovations are expected to make the confirmation periods shorter and hassle-free without compromising the network’s security.

Note: this article was originally published on November 20, 2020.