Blockchain - how to verify a transaction

The high popularity of Bitcoin has a downside: the number of transactions and the complexity of calculating hashes are growing. As a result, the speed of transferring funds decreases, and they may get stuck in the queue for several days. Therefore, there is often a need to check a Bitcoin transaction to make sure that the transfer went as intended.

The number of people wishing to work with the popular cryptocurrency is growing, and problems with transactions are increasingly arising. You have to regularly monitor bitcoin transactions. Despite the fact that funds move without intermediaries, you must always know where to look for transaction confirmation and how you can speed up the passage of payments in the system.

How the Bitcoin system works

Information about all operations since the launch of the system and the location of coins in users’ wallets is contained in the registry - the blockchain. It is stored simultaneously on many computers of system participants. To protect against Bitcoin transactions are entered into blocks for entry into the ledger. Each of them is signed with a cryptographic key containing information about the previous block and current operations. Viewing the block sequence provides information about all operations. The blockchain is open to system participants and everyone can track the necessary data in it.

Accordingly, Bitcoin transactions can be verified through the blockchain. He also calculates the wallet balance using its key. This is convenient for novice users who have just begun to explore a new financial industry, and for businessmen conducting large payments.

Scheme of formation of transactions and blocks using the example of the BTC blockchain.

Bitcoin transactions are a cipher that is passed from wallet to wallet via the blockchain. They are considered completed if the money reaches the recipient.

The problem is that transaction data is anonymous. Therefore, even though the ledger is open to everyone, it is difficult to glean information about one specific transaction from billions of others.

What is a transaction on the Bitcoin network and what types of transactions are there?

A Bitcoin transaction is a transaction, a process of transferring cryptocurrency.
In the Blockchain database, it is stored in the form of a special record, which is similar to an entry in the ledger about the issuance or receipt of funds. The information is stored in the Blockchain system and is available for viewing by anyone. You can track a Bitcoin transaction using data such as an address, block or hash.

There are two types of transactions:

• Unconfirmed . The main reason for their occurrence is that data is not recorded in the Blockchain system instantly, but at certain intervals, 5-6 times per hour. Recording occurs according to the stack principle. One block contains a certain number of records, so if the network load is high, there is no place for the transaction, and it waits for its turn.
• Confirmed . Getting a transaction into a newly found block is only the first step. In order for the funds to reach the recipient, 6 such confirmations are needed. That’s when he will be able to manage them.

What are Bitcoin transactions

Bitcoin transaction is a computational process that takes place in the blockchain chain. A group of signed transactions represents a generated block. As soon as it is created, transfers between wallets registered in it will be completed. Despite the frequent formation of blocks, the process may take a long time.

The reason is that there are many people who want to transfer Bitcoin. Accordingly, there are more transactions than fit into one block. Therefore, miners include the most profitable ones, which have a maximum commission. The remaining translations remain to wait their turn. The commission is paid to miners as a reward for calculating the hash that confirms the block.

The system is completely anonymous, so Bitcoin transactions on the blockchain are tracked using its key. Each transaction record contains three data fields:

• input (wallet address from where coins are sent);
• transfer amount;
• output (recipient's wallet address).

A BTC transaction can be verified before and after it is confirmed in a block. Large amounts are confirmed in 6 blocks. If this does not happen, the deal may be stuck pending. The fewer confirmations you need to receive in blocks, the faster the payment will go through.

The block includes:

• hash of the previous block;
• transaction data;
• hash with which the current block is signed.

Computers participating in the blockchain network maintain a complete ledger of transactions. Information about each new transaction is entered into each copy of the ledger. Therefore, data on the passage of funds does not immediately appear in the wallets of the sender and recipient. The private key for transferring coins is formed in the wallet of 25 or 34 characters. The owner of this key can view the payment status. Other users, despite the openness of the registry. have no right to such actions.

Where are the cryptocurrency exchanges?

Many readers will ask why there are no cryptocurrency exchanges on the listed list, because they also provide the opportunity to store bitcoins in personal accounts. This is due to the fact that recently such services are often closed or behave very incorrectly with their users.

And simply, they can appropriate other people’s money, justifying this for various reasons. Frightening statistics, but almost every second crypto exchange has failed.

Of course, exchanges are convenient for trading cryptocurrency, but they are not suitable for storage. It is better to store Bitcoin in wallets that offer not only a wide variety of functionality, but also a high degree of security.

And if you prefer maximum security, albeit at the expense of convenience, then I recommend storing bitcoins on your computer using Bitcoin Core or Electrum.

Denis HyipHunter Knyazev

Blog creator. Private investor. He has been making money in highly profitable investment projects and cryptocurrencies since 2014. Consults partners. Join the blog's Telegram channel and our chat.

Don't miss other articles from this section:

• 10.06.2020385

  Cryptocurrency Ripple (Ripple) - detailed review

• 10.06.2020465

  What is DPoS or Delegated-Proof-of-Stake in cryptocurrency?

• 10.06.2020477

  Bitcoin halving in 2020. What is it and why is it needed?

• 30.07.2020368

  Trustee Wallet – Reviews and review of a convenient, anonymous crypto wallet with cashback

• 10.06.20203272

  Telegram Open Network (TON) – Pavel Durov’s blockchain platform

• 10.06.202040728

  How to create a Bitcoin Core wallet and how to use it | Bitcoin cold storage

Transaction order

• The transfer of bitcoins is completed using the individual secret key of the owner of the sender’s wallet.
• Information about the transaction enters the network from the sender's address.
• In a random order, data about the operation for verification arrives at the nodes that form and sign the block.
• The finished block is added to the blockchain, creating records of transfers made by users.
• Information passes to nodes (nodes), implementing the principle of openness.

Such a simple and reliable system determines the popularity of Bitcoin.

How long does a Bitcoin transaction take?

The system was not initially designed for fast payment processing. Typically, users have to wait about 10 minutes. During this time, the transaction will be entered into the block and confirmed with a cryptographic signature. But the growing number of Bitcoin transactions has meant that even transactions backed by large fees take about an hour to process. And this is not during peak hours. For other transactions the situation is even worse. Especially if a large amount is transferred that requires confirmation in several blocks. Then payment takes place a day or more later.

What affects transaction speed

• Transfer amount. The smaller the amount, the smaller the number of blocks in which it is confirmed. A small translation, for which one block is enough, can actually take 10 minutes. The exception is during periods of maximum network load, when even with these parameters you have to wait several hours.
• Network loading. When there are few transactions, the chances that miners will pay attention to your transaction increase. However, the load is steadily growing and the combined computing power of the network is not enough, despite the performance of calculating block signatures amounting to trillions of hashes per second. In this case, the size of blocks (the number of transactions in them) reaches a critical value.
• BTC exchange rate fluctuations. With a sharp increase or decrease in the price of Bitcoin, the activity of traders speculating on the stock exchange increases. This has a serious impact on Bitcoin transfer times. In order for the transfer to proceed quickly, it must be carried out during a period of minimal network load.
• Commission fee for miners. Naturally, more profitable transactions will be processed first. Therefore, the more commission you offer, the faster your transaction will come to fruition. Of course, someone offers more, he ends up ahead. You either have to pay more, or wait until the flow of more expensive deals passes.

Therefore, it will be useful to know where you can see confirmation of a transaction in Bitcoin. Such knowledge allows you to correct the situation in time so as not to let your counterparty down.

How to choose a bitcoin wallet, all types and examples

Choosing a bitcoin wallet is a labor-intensive process. Each technology has its own purpose. The pros and cons of wallets are directly related to the tasks that they should help their owner solve.

The table shows all types of Bitcoin wallets and the purposes for their use.

Thick desktop wallets can be used as both hot and cold storage. In the first case, they are connected to the network, and in the second, they work without the Internet.

You need to choose a Bitcoin wallet based on how long the cryptocurrency will be stored on it.

In general, all cold wallets are less convenient and not intended for everyday use, but they are much safer than hot ones.

Any type of wallet can be single-currency, only for bitcoins, or multi-currency, that is, supporting other types of cryptocurrencies. The second option is suitable for investors who store different coins in their portfolio, and for those who would like to exchange currencies within their wallet.

Popular wallets include: bitcoin core wallet, cryptonator wallet, ledger nanos.

What is bitcoin.org, and why is this site needed?

Bitcoin.org/ru/.
Bitcoin.org is an international and very famous web resource from which many people download Bitcoin wallets.

Data from similarweb.com.

Bitcoin.org has over 7 million visitors. It does not contain complete information on all topics related to cryptocurrency, but there is basic knowledge necessary for beginners.

The main thing that Bitcoin.org is useful for is the ability to download the latest and admin-verified version of the wallet. This is suitable for those who do not know how to download from Github.com and do not want to deal with the interfaces of official websites in English.

Unfortunately, bitcoin.org does not have a convenient search by wallet name, so download links will be useful for those who will install the software.

Below is an overview of each type of wallet with a description of technical characteristics and features of use.

Desktop Bitcoin wallet

Bitcoin Core.
Desktop wallets are programs for a personal computer. They come in 2 types.

Thick wallets are considered more secure than thin ones and are often used for cold storage.

Downloading the entire blockchain can take from several hours to several days if the Internet is slow, so such wallets are suitable for experienced investors who want to secure large sums of money.

Downloading a light wallet takes a few minutes or even seconds; it does not require a large amount of memory on your hard drive; even a low-power laptop can handle it.

Desktop wallets are created for different operating systems:

• Windows 64-bit;
• Windows 32-bit;
• Linux;
• Mac OS.

If a person is not very computer savvy and does not know what version of Windows he has, he can always choose 32 bits.

The table lists wallets by OS. You can download them either from the official website or from bitcoin.org, where the latest version is usually posted there.

The most famous wallet is Bitcoin Core, it was also the very first one created. The developer is Satoshi Nakamoto himself.

When downloading software from websites, it is important to pay attention to the domain! Phishing is common on the Internet, that is, the creation of fraudulent sites with a very similar name. If you go to such a site and download a wallet, attackers will be able to steal private keys and other personal data.

For those who want to read more information from wallet developers, it is useful to familiarize yourself with the official websites.

On these sites you can find other versions of the software, for example, mobile wallets for Bitcoin. You can create a Bitcoin wallet in Russian only at greenaddress.it/ru/.

Mobile app

It is convenient to make transfers in bitcoins from a smartphone, especially since many cafes, restaurants and shops have begun to accept this cryptocurrency.

Mobile applications are also released for all major platforms:

• Android;
• iOS;
• Blackberry;
• Windows Phone.

The table shows the most reliable wallets according to bitcoin.org, details by operating systems and a direct download link.

Previously unmentioned wallets have such official websites.

A good example of a mobile Bitcoin wallet is Bitcoin Wallet, the mobile version of Bitcoin Core.

Web wallet

bitgo.com.
This is the least secure option, but it is convenient for those who want to quickly process payment transactions.

Only 2 wallets that have such official websites have not been mentioned before.

In addition, there is Cryptonator, which is a Bitcoin wallet with a linked Visa or MasterCard card. It can be downloaded here ru.cryptonator.com.

Over the past year, complaints about the operation of Cryptonator have become more frequent, so this option is not recommended.

Another well-known and oldest Bitcoin wallet is Blockchain.info, it can only be downloaded from the official website, using this link blockchain.info/ru/wallet/#/. It is important for potential users to know that recently very large commissions have been set for making payments through Blockchain.info (up to 35%), and because of this it is not included in many ratings. In all other respects it works great.

Bitcoin hardware wallet

Ledgerwallet.com
Bitcoin storage devices are secure flash drives onto which software is installed from the manufacturer’s official website.

Additionally, such flash drives are protected by a PIN code and a secret phrase.

Here is a list of the best hardware storage for Bitcoin.

The most modern of them is Ledger Blue, which has a large screen and multi-level protection.

Paper

Keys printed on paper are called wallets. According to modern security standards, they should be encrypted in QR codes.

There are 3 good wallets for Bitcoin:

• Bittaddress.org;
• tools.bitcoin.com/paperwallet/;
• walletgenerator.net.

In this video review you can see how to generate keys and use a paper wallet for Bitcoin, PostCoin or any other cryptocurrency from the list of available ones.

List of good wallets on exchanges

Absolutely all exchanges have wallets for Bitcoin, because this is the most expensive and popular cryptocurrency. The wallet on the exchange is not intended for long-term storage of coins, but for trading and withdrawal of earnings.

Here are the most popular exchanges where you can open a Bitcoin wallet.

Registration of a personal Bitcoin wallet in Russian is available on Yobit.

Registration is the same on all exchanges. From this video review, using Exmo as an example, you can learn how to replenish a Bitcoin wallet and how to work with exchanges.

When replenishing your wallet on the exchange, it is important to send an amount no less than the minimum. For Bitcoin, the minimum is usually 0.001 BTC, that is, 100,000 satoshi.

How to check a bitcoin transaction

To track the transfer, you need to use one of the public services:

• Blockchain.Info is a virtual wallet service operating since 2011. Through it, you can view the status of transactions and other data online. Presenting them in graphs and tables makes working with the service very easy.

• Chain.so - Free public service where you can track the status of a transaction. It allows you to quickly search for a specific transfer among all transactions and see all available transactions for it.

To perform a search, you need to know the hash (ID) of the transaction and enter it into the search field in the Info section of the site. On the transfer information page you can find all the available data. Among them are the status and the number of confirmation blocks that she managed to complete.

Rating TOP 16 best wallets

The top includes free Bitcoin wallets that meet the following parameters:

1. The minimum number of negative reviews and the maximum number of positive ones.
2. Modern and correctly working security systems.

The rating presents different types of wallets so that you can choose Bitcoin storage for any need.

Bitcoin Core and Armory Review

Bitcoincore.org.
Bitcoin Core is a heavy desktop wallet and an application for it that allows you to expand its functionality.

The wallet's developers are part of the Bitcoin Foundation, and the first versions were created by Satoshi Nakamoto. Bitcoin Core is most often used as cold storage on a computer not connected to the Internet. Downloading the full version of the blockchain takes at least 6 hours, even with a very good and fast Internet connection. You will need to free up more than 163 GB of memory on your hard drive. To keep your money safe, you should not use your computer with your wallet for other work.

This video gives an interesting short overview of the Bitcoin Core wallet.

And this video shows in detail the installation of Bitcoin Core and provides recommendations for the correct installation of the program.

Bitcoinarmory.com.

In terms of security, Bitcoin Core and Bitcoin Armory are still the most secure and reliable storage facilities for bitcoins.

Armory interface.

Armory has 3 user modes, including expert. Allows you to create messages signed with a cryptographic signature, there is a backup. The wallet can work in offline and online modes.

Electrum – reliable and convenient

Interface of the electrum.org mobile application.
Electrum is a lightweight wallet, quick to install, and not memory intensive.

The wallet can be used for hot or cold storage.

It is often written on the Internet that Electrum is multi-currency, but this is not true.

Versions of Electrum created for different currencies are not compatible with each other, there is no conversion within your own wallet or single address.

On Electrum you can only store BTC for Bitcoin.

BreadWallet - the best wallet for iPhone

Breadapp.com.
BreadWallet is popular among beginners for its simple and user-friendly interface, while more experienced investors value it for its reliability.

BreadWallet is especially popular with iPhone owners, because good and reliable wallets are rarely written for Mac OS. The Android version was released relatively recently, but is quickly gaining popularity.

Green Address is a great option for PC

Greenaddress.it/ru/.
The Green Address wallet has the following characteristics.

Green Address is considered one of the most convenient and reliable Bitcoin storage facilities. Details can be found in this video.

GreenBits – a modern wallet for Android

Greenbits.com.
Green Bits is an application from the Green Address team that allows you to work on smartphones with the Android platform.

Green Bits is convenient for fast payments, for example, in cafes and restaurants.

Airbitz – fast and mobile

Mobile application interface.
Airbitz is different because it can function offline as cold storage.

The wallet is distinguished by convenient and simple authorization; beginners like it with its pleasant design.

Airbitz.co.

Through Airbitz, you can even make payments via Bluetooth; thanks to client-side encryption and key rotation, security still remains high.

CoinSpace - the best wallet for Windows Phone

Bitcoin wallets are very rarely written for Windows smartphones, and CoinSpace is the only proven option.

The advantage is that the wallet also has a browser version, that is, it can be used both from a PC and a smartphone.

Xapo – Bitcoin wallet with international card

Xapo.com.
Xapo allows you to order an international debit card for your Bitcoin wallet – and this is the main advantage of the system. The cost of issuing a card is 20 USD, the first year of service is free, then 12 USD annually.

Through the Xapo wallet you can buy bitcoins at a fixed rate for 3 days. Learn more about Xapo in this video.

Copay - the best multi-platform wallet

Copay.io.
Copay is a multi-currency wallet that works on all popular operating systems. You can store more than 140 cryptocurrencies in addition to Bitcoin.

Copay is included in the top of authoritative reliability ratings and provides all modern security systems.

MyCelium – a specialized wallet for Android

Mobile application interface.
MyCelium is a wallet that has a single and very popular version - only for Android.

The wallet has the ability to exchange bitcoins for dollars. This video gives an overview of the functionality of MyCelium.

Bitcoin Wallet – wallet for BlackBerry with Russian language support

Bitcoin Wallet is a mobile wallet that is actively used by BlackBerry owners.

This video review shows the application interface, the blogger explains the principles of operation and talks about the advantages and disadvantages, and shows how to top up a wallet for bitcoins.

Coinomi – multi-currency mobile wallet

Information from the official website coinomi.com.
Coinomi is convenient for owners of different cryptocurrencies; in addition to Bitcoin, you can store more than 40 coins in your wallet.

The official website of the developers states that since the creation of the system in 2014, not a single Coinomi wallet has been hacked. Judging by the positive reviews and lack of complaints, this is true.

Details can be found in this video.

Jaxx – multi-currency and universal option

Jaxx.io.
Jaxx is a multi-currency wallet for all major operating systems. In addition to Bitcoin, you can store LTC, DASH, ETH, ETC, LTC on it.

To better understand the advantages and disadvantages of Jaxx, this video review will be useful.

Bitcoin wallet – Walletgenerator

Walletgenerator.net
The best and most famous paper wallet for Bitcoin is Walletgenerator. It supports 127 cryptocurrencies and is very easy to use. The wallet is created on the website walletgenerator.net.

Ledger Blue – Best Cold Storage for Bitcoin

ledgerwallet.com.
Ledger is considered the most advanced developer of hardware wallets, and its newest and most advanced model is Ledger Blue. You can buy the device on the official website ledgerwallet.com or from distributors, the price is 274.80 euros.

Cryptocurrencies.

The wallet is multi-currency and has a full range of modern security methods.

Software.

The following wallets can be installed on Ledger Blue:

• Ledger Wallet Bitcoin and Ledger Wallet Ethereum;
• Copay;
• MyEtherWallet;
• GreenBitz;
• Electrum;
• BitGo;
• Mycelium.

This review shows the functionality of Ledger Blue, installing the software and transferring money.

What are confirmed and unconfirmed transactions?

When you look at transfer confirmations, the information about transactions will show the inscription “unconfirmed transaction!” or “confirmed transaction”. The first means that the deal has not yet been included in the required number of blocks. Depending on the amount, even more than six such blocks may be required. Then the waiting time will increase significantly.

Confirming each block separately increases the protection of blockchain records from tampering by attackers. That is, the loss of time is a payment for protection from fraudulent activities (repeated sending of the same amount from the wallet to different persons, etc.).

Until confirmation is received, all that remains is to monitor the status through the sites and, if necessary, intervene in the process.

Impact of delays on network performance

Even transactions with the maximum commission sometimes do not have time to be confirmed within the 10 minutes provided for by the system. Such delays greatly complicate transactions, especially if they have a minimum commission. This causes certain consequences:

• Price fluctuations. Cryptocurrency transfers, the actual turnaround time of which is a couple of days, reduce the popularity of Bitcoin. A decrease in transaction activity causes exchange rate fluctuations. In the future, this phenomenon may cause an irreversible drop in demand and, as a result, the price of bitcoins.
• Trading losses. Deals fall through due to failure to meet deadlines. Buyers do not want to wait long and insist on making payment in another form.
• Reputational losses. Delays in payment worsen the reputation of the buyer and the cryptocurrency payment system as a whole.

To avoid this, increasing the block size is being considered. A positive decision will relieve the network by speeding up the confirmation procedure.

Bitcoin: cryptocurrency rates to the ruble

Current cryptocurrency rates to edc blockchain – follow the fluctuations online. Information comes from the largest exchanges and is processed in real time. You can see exchange rate changes for most of the most popular fiat currencies. Online charts, automatic converter and news will allow you to quickly navigate the current market trends in the relationship between edc blockchain and cryptocurrencies.

It is always worth remembering that the cryptocurrency exchange rate is quite volatile. It can either grow by several percent in a couple of minutes or fall. This volatility attracts most investors, who constantly monitor the price of cryptocurrency in order to buy at the lowest price, and then wait for growth to sell at the highest. You can buy cryptocurrency quickly and at a favorable rate in the Matbi online exchanger. The service has been operating for more than five years and can offer users not only the exchange of cryptocurrencies, but also their reliable storage. Matbi's built-in crypto wallet supports four leading cryptocurrencies: Bitcoin, Litecoin, Dash and Zcash. A high level of protection for users’ crypto assets is provided by “cold” wallets, as well as three-factor authentication when entering your personal account (PIN code, email code and SMS code, which can be replaced with Google Authenticator). The service is also interesting to users, as it includes a multi-level affiliate program. 24-hour technical support promptly answers all user questions. How to become the owner of cryptocurrency in Matbi is discussed in detail in this video.

Estimate!

6.12

10010

How to speed up transactions in Bitcoin.

Despite compliance with all formal conditions, the transfer may hang for a long time awaiting confirmation. Until it is confirmed, you can speed up the process by changing its initial parameters (commission to miners).

There are several ways to speed up payment processing:

• Set a commission greater than 0.0002 BTC. The higher it is, the faster the transaction record will be processed.
• Transfer a large amount at once. The larger the transfer size, the higher its priority in the system.
• Make payments through specialized platforms that allow you to exchange bitcoins using internal tools. In this case, there is no need to wait for confirmation of the operation in the blockchain,
• Use open transactions containing full information about the sender and recipient. Such a transaction is faster, but contradicts the very idea of ​​​​anonymous payments in Bitcoin.
• Resend money by increasing the commission and enabling the “Opt-In Replace-by-fee” function. Without this function, the system will decide that this is not a replacement, but a double waste. In this case, the resubmission will be ignored.

Remember that all transaction information is stored on the blockchain. You can find out where the translation is only from it. Using services like Blockchain.Info makes viewing data more convenient, and the information received from there is more relevant than in your wallet.

What is Bitcoin?

Bitcoin is a peer-to-peer payment system that uses cryptographic methods, and at the same time, data on transactions within it is publicly available to all participants. A more detailed description can be found on Wikipedia. The BTC cryptocurrency of the same name exists only on the Internet, in digital form, but it can be converted into any real (fiat) currencies. In simple words, Bitcoin is a digital currency and payment system that is not centralized (like in a bank), and lives through the work of many computers connected to the blockchain network (we will talk about it below).