Ethereum is the second-largest cryptocurrency by market capitalization and has innovated the blockchain space through its smart contract functionality.However, the increased network usage and addition of layer-enabled epochs such as ICO, DeFi, and NFT have raisedconcerns over time about sending ETH transactionsand increasing network fees.
An Ethereum transactionconfirmation is completed on average in 16 seconds, however, transactions can take between 1 to 5 minutes if more confirmations are required to validate the transaction. Thus, transactions are reliant on the imposed security features of each wallet.If the network is busy and transactions are sent without paying the premium “tip,” transactions can be delayed because miners prioritize higher fee transactions.
What Is Ethereum (ETH)?
Blockchain projects such as Ethereum (ETH) surfaced to expand transaction and data transparency through a decentralized ecosystem.Developed by Vitalik Buterin, ETC uses a proof of work consensus mechanism to add transactions to the network. People use graphic card processing power to “mine” and validate network transactions. Ethereum currentlysupports between 10 – 15 transactions per secondand has come under scrutiny due to its high transaction fees, scalability, and interoperability issues.
Ethereum is advancing a new protocol to migrate to a proof of stake consensus mechanism, where token holders become network validations, thus decreasing Ethereum’s carbon footprint. To date, over6.8 million ETHare staked on the Ethereum beacon chain, which operated in tandem with Ethereum’s proof of work.
TheEthereum Foundationimplemented a series of network upgrades, including the Berlin and London updates, to aid the network transition. One of the most notable and criticized updates is theEIP-1559, which helps mitigate high transaction fees. Finalized on August 5th, it added a transparent base fee while decreasing miners’ rewards by burning part of the fees. While the new implementation did not reduce costs, it helped Ethereum become a deflationary asset as more tokens were burned.
This Is How You Send Ethereum
Like banks, Ethereum uses a unique code called a wallet address to send a transaction from one account to another. Thus, we can think of a blockchain address similar to an IBAN, with each blockchain ecosystem having its standard. For example, Ethereum addresses start with 0x, followed by a string of 64 characters.
To send an Ethereum, users need tocreate a new Ethereum wallet with an address.The wallet will generate a seed phrase which is the unique private key of the wallet. Without it, users will be locked out of their funds. Alternatively, they can sign up for a cryptocurrency exchange and access many token wallets; however, they will not own the private keys.
Finally, users need topurchase ETH from a secure crypto exchangeand find the unique ETH address and network to send the tokens.Transactions sent to the network are final and irreversible, meaning they cannot be undone; thus, sending Ethereum tokens to a Bitcoin account will result in a loss of funds.
What Are Ethereum Confirmation Times?
Ethereum confirmations are amechanism to validate transactions sent to the networkbefore adding the funds to the wallet. Thus, miners are tasked with performing complex computer computations to validate a block containing many network transactions.
Confirmations are the assurance that a transaction has been accepted and added to the blockchain. As each new block is mined, it adds furtherevidence of transaction validity.When the number of confirmations is 0, transactions have been rejected and not sent successfully to the network.
Number of Confirmations Ethereum Requires
The number of confirmations required for an Ethereum transaction to be successful varies depending on the source. Exchanges require more certainty and can requirebetween 20 to 30 network transactions before validating the ETH transaction.Ethereum’s whitepaper notes that 7 confirmations are sufficient to validate anetwork transaction.
Expect To Wait 1 to 5 Minutes To Transfer Ethereum
Ethereum’s protocol processes transactions faster than compared to Bitcoin. The average transaction time depends on the number of confirmations needed.An Ethereum networkconfirmation completes in 16 seconds and depending on the required confirmations, transactions can take between 1 to 5 minutes.Thus, transactions are reliant on the imposed security features of each wallet.If the network is busy and transactions are sent without paying the premium “tip,” transactions can be delayed because miners prioritize higher fee transactions.
Ethereum Transfer Fees
Ethereum transaction fees have been the subject of debate as the network continues to grow in size. EIP-1559 was expected to improve fee transparency but did not guarantee lower fees. Before the London upgrade, transactions operated on an auction basis, with miners selecting fee premiums to complete transactions faster. Data indicated theaverage transaction fee during the height of the DeFi and NFT mania was$69.
Users must pay Gas for every transaction, which is the equivalent of a transaction fee. Ethereum’s algorithm adapts the Gas based on the network demand, while users can “tip” miners to process their transactions faster. Network fees still fluctuate, however now the base fees are more transparent to the buyer.
