How Do I Choose a Network for a Cryptocurrency Transaction?

The cryptocurrency market is filled with different projects that offer fast transactions with almost zero fees, providing numerous ways to transfer value. Furthermore, some established networks, or projects may support multi-chain and layer 2 (L2) scaling solutions, expanding the list of potential options for conducting crypto transactions. 

If you want to optimize your transaction and find the best ratio between speed and cost, it may require you to understand and check certain network metrics. Here is what you should keep in mind when selecting a network for a transaction.

Network specifics

Every cryptocurrency network has its own base layer specifics that may affect transaction speed and cost. For example, the average block generation time in the Bitcoin network is about 10 minutes. Each block may contain a limited number of transactions depending on their weight in bytes. As a result, it is considered that Bitcoin’s base layer may process approximately 7-10 transactions per second.

However, if you make a Bitcoin transaction, it doesn’t always mean that your transfer will be processed in the next block. This is because your transaction can be affected by total network activity, hashrate, and transaction fees. If the network is congested, there will be a backlog of transactions. This backlog is recorded in the so-called mempool. Mempool is periodically cleared by transaction validators each time a new block is added to the blockchain. Pending transactions standing by in the mempool are typically ranked by their commission fee, weight, and waiting time. 

Network activity and fees

If network activity is high, it may increase the backlog in the mempool. Transactions with low fees or “too much weight” may wait for a few blocks until they are able to be processed. When users see a backlog in mempool, this may result in paying more in transaction fees to get transactions to go through faster. It can be compared with jumping to the front of the queue with a money bag. The more users want to process their transactions faster, the higher transaction fees will result in the network. As a result, transactions that initially had relatively low fees may have to wait a certain period of time when commissions return to previous rates. 

If you don’t want your transaction to be stuck for a while, you may want to check the current network activity, and average network fees. It may help you understand what to expect and compare the situation in one network with another one.

Bitcoin transaction fee chart. Source: YCharts

Comparing network specifics

The architecture of certain blockchain networks allows the processing of thousands of transactions per second. This means that they may have a larger queue before such factors as network activity may start affecting network fees. Since not all networks with high scalability can be considered popular, or may experience frequent congestion, they may offer almost zero transaction fees. 

When one network experiences congestion or you consider its transaction processing inappropriate, you may try to use another network to save funds on commissions or process the transaction faster. However, you should keep in mind that using another network may mean transferring other cryptocurrencies. For example, Bitcoin Cash (BCH) cannot be credited to a Bitcoin wallet because they use completely different networks. However, in case you use the wrong network for the transaction, the sent crypto can be lost. 


Another factor to consider when choosing a network is the number of required confirmations to validate transactions. Once a transaction is concluded in a new block, it will count as the first confirmation. When the next block is added to the blockchain, it will count as a second confirmation.

The number of required confirmations depends on the network and the provider of your destination wallet address. Some networks may produce new blocks in seconds, while others may generate them in minutes. At the same time, platforms may require several confirmations to prevent double-spending and the risk of unconfirmed transactions. 

You are able to calculate how fast the transaction will be processed by multiplying the number of confirmations and the average block generation time. For example, three confirmations for Bitcoin, which has a 10-minute average block generation time, means that a transaction will be processed in 20-30 minutes. 

Keep in mind that certain unexpected events in the network may increase the number of confirmations required by crypto exchanges and other platforms to mitigate invalidation risks. 

Multi-chain and L2 solutions

In the modern crypto market, users are not limited to processing transactions only through the main network or a base layer. Crypto enthusiasts may use several networks to transfer a cryptocurrency (multi-chain), or use scaling solutions built on top of the main network (L2). In these cases, users may want to compare different options depending on their availability. 

Let’s say you want to transfer Tether (USDT) which can be sent using Ethereum, Tron, and other networks. You may want to compare current network activity and average transaction fees in supported networks to find the most appropriate option. When selecting a network, it’s important to pay attention to your sending and destination wallet addresses. They have to be within the same network, because, for instance, transferring USDT from the Ethereum wallet address to the Tron wallet address may cause a loss of funds. 

When deciding what L2 solution to use, you may want to compare the same metrics to find the option that fits your needs best. Keep in mind that your wallet or platform where you store your funds may not support transactions via certain L2 solutions, ​​so ​​choose according to what is available to you.

Ethereum and L2 solutions fees. Source: L2fees

Closing thoughts

Selecting an appropriate network for a crypto transaction highly depends on purposes, the number of available options, and timing. If you want to transfer a certain amount of funds, you may consider checking what networks/L2 solutions your wallet supports and analyze their current status. It may help you process transactions without a delay and save some funds on commissions. When selecting an option for a transaction, make sure that your sending, and destination wallets use the same network. Otherwise, it may lead to unpleasant consequences.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

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