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Cryptocurrencies are unlike traditional money as they don’t have a physical representation. For this reason, making a crypto transfer of your digital coins to a specialized wallet is not always as easy and fast as taking a fiat currency coin or banknote and putting it into your pocket.
The time it takes for your purchased crypto to land in your wallet varies from exchange to exchange. Some blockchains are able to process the transactions almost instantly, while some take several hours, maybe even days, to clear the transaction, especially if they utilize the Proof-of-Work (PoW) consensus protocol.
In this article, we’ll discuss the multiple factors that influence how long a crypto transfer takes on blockchains, as there is no single and straightforward answer to this question.
Key Factors Influencing a Crypto Transfer Time
In crypto trading, sometimes it takes seconds to miss on a lucrative trade, so having the assets you’ve just bought as soon as possible could be vital for the successful completion of your trade.
The transaction time of a cryptocurrency is one of the indicators of its efficiency. To be efficient, a crypto project needs to incorporate a powerful and fast processing method into its blockchain architecture so that it can transfer, verify, and confirm the encrypted transaction data blocks almost instantly.
The transaction speed per second is a metric (TSP) that measures the number of transactions a blockchain is capable of processing per second. The TSP depends on several factors, such as the mining hash rate and the blockchain traffic, to name a few.
Mining Hashrate
Crypto mining refers to the process of creating a new cryptocurrency with specialized hardware and software equipment operated by miners who solve complex cryptographic puzzles generated by the network’s PoW consensus mechanism.
In crypto mining, the hash rate is an important indicator of blockchain security, as it prevents cyber attacks on the network. The higher the hash rate is, the higher the number of miners competing with each other to solve the cryptographic puzzle imposed by the Proof-of-Work (PoW) consensus algorithm. In turn, the solution to this puzzle is the proof miners must submit to the blockchain network in order to be awarded a new coin.
Blockchain Traffic
The high hash rate is also an indicator of the popularity and demand of a particular cryptocurrency operating on a PoW consensus mechanism. When the hash rate increases, there are more miners competing to solve the PoW puzzle and verify their transaction data blocks on the blockchain network.
- 350+ Cryptocurrencies Listed
- <0.10% Transaction Fees
- 120 million Registered Users
- Secure Asset Fund for Users
- Earn On Deposits
- US Based
- Start with as little as $10
- Buy and sell 200+ cryptocurrencies
- Pro Solution for larger traders
- Available in 190+ countries
Basically, the more computational power is put into mining a certain coin, the higher its market demand.
On the other hand, the increased demand for the coin leads to increased blockchain traffic which can slow down the transaction speed as more miners wait in line for a position to verify their block on the network. In this way, the network’s performance begins to deteriorate, leading to slower transactions and higher transaction costs.
Cryptocurrencies With High Transaction Speeds
Ripple (XRP) and Neo (NEO) are among the cryptocurrencies that boast some of the highest crypto transfer processing speeds.
Ripple (XRP)
Ripple is a protocol that facilitates global blockchain payments and crypto solutions for businesses. The platform’s powered by its native XRP token for streamlining fiat-to-crypto transactions.
One of the most prominent features of the Ripple platform is its super-fast transaction processing speed, resulting in some of the lowest transaction costs in the industry.
Namely, this distributed ledger can process transactions in less than 5 seconds, making it one of the most superior payment processing platforms that provide real-time settlements of your transactions.
As the platform does not estimate the value of the crypto transfer but rather the amount of XRP used in a transaction, it provides both low-cost and super-fast transaction processing services for its clients.
To this end, Ripple users can make cost-effective cross-border payments in real-time regardless of the transacted amount, as both large and small crypto transfers will incur the same transaction fee.
Eos (EOS)
Eos is a blockchain platform created to provide scalability and fast processing architecture for decentralized apps (dApps).
The Eos platform can perform 1,000-4,000 transactions per second, which ranks it among the most scalable crypto trading platforms in the industry. Eos achieves this staggering TPS number by employing the DPoS (Delegated Proof-of-Stake) consensus algorithm that supports high-volume transaction throughput.
As previously mentioned, high TPS implies low transaction fees, and Eos is not an exception to this rule. By having a powerful processing engine underpinning its platform, Eos is able to provide its users with a fee-free transaction model. According to this model, you won’t have to pay any fees for receiving or sending your EOS token holdings to another digital wallet address.
Conclusion
The transaction speed is vital for the wider adoption of cryptocurrencies and blockchain technology in general as it underpins its usability and utility. To sum up, low TPS rates typically incur higher transaction fees, less satisfied clients, and increase the platform’s vulnerability, which could lead to significant financial losses.
On the other hand, higher TPS rates result in almost instantaneous crypto transfers, more efficient asset management, and reduced risks related to system errors and delays.