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How does this impact buy/sell orders? If I place a buy order at t = 0 where btc = 10, but the order isn't processed until t + 3hours where btc = 15, do I pay 10

by rankam 9y ago

How does this impact buy/sell orders? If I place a buy order at t = 0 where btc = 10, but the order isn't processed until t + 3hours where btc = 15, do I pay 10 or 15?

viraptor 9y ago
If you're exchanging money for bitcoin, it happens within an exchange. No public transfer between wallets needs to happen. (Only when you actually deposit / withdraw the bitcoin)
hanbura 9y ago
At most (all?) exchanges you trade with currency that's already deposited at the exchange. So you can only create a buy/sell order if you gave them the coins to fulfill the order instantly. The current situation makes arbitrage less effective and slows down trade because it's more expensive to move bitcoins to an exchange though
gomox 9y ago
Exchanges (where trades like the one you describe happen) operate outside of the blockchain. You only transact with them on the blockchain when depositing or withdrawing money from the exchange.
- rankam 9y ago
  Thanks, and just so I understand correctly, these pending orders are waiting within the blockchain to be executed, similar(ish) to a task queue?
  - gomox 9y ago
    Yes. They are waiting to be picked up by a miner, based on the fee that the transaction has paid to be included in the blockchain. You can still make a quick (by BTC standards) transaction in these scenarios, it's just more expensive to do so. Right now, a regular simple transaction would have to pay USD 22 to be included in the next block (i.e. within 10 minutes). Here's the reference website for BTC blockchain backlog. It allows you to understand what a good fee is at a given time. https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/
    - rankam 9y ago
      Awesome, makes sense - thanks for your help!
  - razakel 9y ago
    Yes, it's called the "mempool". A higher fee means it'll be executed more quickly, because miners prioritise transactions with higher fees for obvious reasons. It's possible for a transaction to get stuck and never be confirmed if it's fee is low enough. If that happens, then you'd need to send a new transaction, which cancels out the stuck one.

by rankam 9y ago

How does this impact buy/sell orders? If I place a buy order at t = 0 where btc = 10, but the order isn't processed until t + 3hours where btc = 15, do I pay 10 or 15?

viraptor 9y ago

If you're exchanging money for bitcoin, it happens within an exchange. No public transfer between wallets needs to happen. (Only when you actually deposit / withdraw the bitcoin)

hanbura 9y ago

At most (all?) exchanges you trade with currency that's already deposited at the exchange. So you can only create a buy/sell order if you gave them the coins to fulfill the order instantly. The current situation makes arbitrage less effective and slows down trade because it's more expensive to move bitcoins to an exchange though

gomox 9y ago

Exchanges (where trades like the one you describe happen) operate outside of the blockchain. You only transact with them on the blockchain when depositing or withdrawing money from the exchange.

rankam 9y ago
Thanks, and just so I understand correctly, these pending orders are waiting within the blockchain to be executed, similar(ish) to a task queue?
- gomox 9y ago
  Yes. They are waiting to be picked up by a miner, based on the fee that the transaction has paid to be included in the blockchain. You can still make a quick (by BTC standards) transaction in these scenarios, it's just more expensive to do so. Right now, a regular simple transaction would have to pay USD 22 to be included in the next block (i.e. within 10 minutes). Here's the reference website for BTC blockchain backlog. It allows you to understand what a good fee is at a given time. https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/
  - rankam 9y ago
    Awesome, makes sense - thanks for your help!
- razakel 9y ago
  Yes, it's called the "mempool". A higher fee means it'll be executed more quickly, because miners prioritise transactions with higher fees for obvious reasons. It's possible for a transaction to get stuck and never be confirmed if it's fee is low enough. If that happens, then you'd need to send a new transaction, which cancels out the stuck one.