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Ethereum: How do Bitcoin clients determine the number of transaction confirmations?

Published by Terlumun Aondover on February 5th, 2025.

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How do Bitcoin clients determine the number of confirmations for an Ethereum transaction?

When sending cryptocurrency transactions, it is important to understand how they are processed and verified. One critical aspect that can be confusing for many users is how Bitcoin clients determine the number of confirmations for a transaction when it is sent to an Ethereum node or exchange.

Bitcoin’s Proof of Work (PoW) consensus algorithm requires miners to verify transactions by solving complex mathematical puzzles to validate each block on the blockchain. The verification process involves several steps, including verifying the sender and recipient addresses, verifying ownership, and providing all necessary information.

Ethereum, on the other hand, uses a different consensus algorithm called Proof of Work (PoW) like Bitcoin, but it also includes a mechanism to determine the number of transaction confirmations. This process is known as the “block reward” or “transaction propagation delay.”

Understanding Ethereum Block Rewards and Transaction Propagation Latency

Ethereum’s block reward system allocates a certain amount of new cryptocurrency units each block period based on the computing power of miners. Miners are incentivized to participate in the validation process by earning new cryptocurrency units as a reward for their efforts.

However, this initial allocation is not directly related to the number of confirmations required for a transaction to be considered valid. Instead, it is related to the “transaction propagation latency”.

Transaction propagation latency

Transaction propagation latency refers to the time it takes for a transaction to propagate through the Ethereum network and reach all the nodes (computers) that have seen it before. This delay is caused by several factors:

Transaction validation: Each node in the network must verify each transaction individually, which increases latency.

Node congestion. As more transactions are generated and confirmed at the same time, the network becomes congested, slowing down the propagation of new data.

Confirmation Determination

When a Bitcoin client sends a transaction to an Ethereum node or exchange, it determines the number of confirmations required for the transaction, taking into account several factors:

Transaction Complexity: The more complex the transaction (i.e., the higher the gas limit), the longer it may take for it to propagate through the network and reach all nodes.

Node Congestion

: If a node is congested, it will delay the propagation of new data, which may result in fewer transaction confirmations.

Transaction Verification Time: The time it takes to verify each transaction individually affects the overall propagation delay.

Conclusion

In summary, Bitcoin clients determine the number of confirmations for Ethereum transactions based on factors such as transaction complexity, node congestion, and transaction verification time. While Ethereum’s block reward system distributes new cryptocurrency units based on the computing power of miners, this initial distribution does not directly affect the number of confirmations required for a transaction to be considered valid.

By understanding these factors, users can better navigate the process of sending transactions across different blockchain networks and make informed decisions about investing in cryptocurrencies.