Liquid Network Peg-in/Peg-out Time Calculator
Estimate Transaction Times
Calculate how long it takes to convert BTC to L-BTC (peg-in) or L-BTC back to BTC (peg-out) on the Liquid Network.
Bitcoin’s slow block time and public transaction data make it a bad fit for high‑frequency trading or confidential asset transfers. The Liquid Network was built to bridge that gap, giving institutions a faster, private, and token‑friendly environment while still anchoring to Bitcoin’s security.
What is the Liquid Network?
Liquid Network is a federated sidechain created by Blockstream that runs parallel to the Bitcoin mainchain. It locks BTC on Bitcoin, issues an equivalent amount of L-BTC (Liquid Bitcoin) on its own ledger, and lets users move that L‑BTC back to the Bitcoin chain through a verifiable 1‑to‑1 peg.
Because it’s a separate blockchain, Liquid can adopt features Bitcoin can’t change easily-like Confidential Transactions and rapid block times-while still inheriting Bitcoin’s proof‑of‑work security through the peg.
How the 1:1 peg works
When you peg‑in, you send BTC to a multi‑sig address managed by the federation. After 102 Bitcoin confirmations (roughly 17 hours), the federation mints the same amount of L‑BTC on Liquid. The reverse, a peg‑out, requires only two Liquid confirmations, making the process quick once the BTC is already locked.
This two‑step system ensures that total supply stays constant: every L‑BTC in circulation is backed 1:1 by a BTC held on the mainchain.
Technical specs that set Liquid apart
- Block time: 1 minute vs. Bitcoin’s 10 minutes → finality in 1‑2 minutes.
- Consensus: federated model with 15 functionaries signing each block; 11 signatures needed for validation.
- Privacy: Confidential Transactions hide amounts while still proving they’re valid.
- Asset issuance: built‑in support for tokens via the RGB protocol, enabling stablecoins, security tokens, and NFTs.
- Scalability: ~1,000 TPS in independent benchmarks, with fees around 0.00001 L‑BTC (≈ $0.35).
Key use cases
Institutions love Liquid for three reasons:
- Fast settlement: Exchanges such as Bitfinex and Kraken move large volumes on Liquid in under two minutes, cutting overnight risk.
- Confidential transfers: The Tether stablecoin issue $420 M of USDT on Liquid, keeping transfer amounts hidden from onlookers.
- Tokenized assets: SIX Digital Exchange leveraged Liquid to list $1.2 B of equity tokens, something Bitcoin alone can’t do.
Liquid vs. other Bitcoin scaling solutions
| Feature | Liquid Network | Lightning Network | Rootstock (RSK) |
|---|---|---|---|
| Block time | 1 minute | Off‑chain channels (instant) | 30 seconds |
| Privacy | Confidential Transactions (amount hidden) | Partial (HTLCs are public) | None (transparent) |
| Native asset issuance | Yes, via RGB | No | Yes (Ethereum‑compatible tokens) |
| Decentralization | Federated (15 functionaries, 11‑sig) | Fully decentralized | Semi‑decentralized (major miner set) |
| On‑chain settlement | Yes | No (settlement via channels) | Yes |
In short, Lightning excels at micropayments, RSK brings EVM smart contracts, while Liquid focuses on institutional speed, privacy, and token issuance.
Getting started on Liquid
Here’s a quick step‑by‑step guide for a newcomer:
- Choose a Liquid‑compatible wallet. The most popular options are Blockstream Green (free, multi‑platform), Jade hardware wallet (≈ $79), or the web‑based AQUA.
- Install the wallet and create a new L‑BTC address. Back up the recovery seed securely.
- Initiate a peg‑in by sending BTC to the address shown in the wallet. Wait for 102 confirmations on Bitcoin.
- Once the federation releases the L‑BTC, you’ll see it in your Liquid balance. You can now trade, issue tokens, or send confidentially.
- To move funds back, start a peg‑out. The transaction finalizes after two Liquid blocks (about 2 minutes).
Running a full node isn’t required for most users, but if you want to contribute to the network, allocate at least 4 GB RAM, 100 GB disk, and a standard x86_64 machine.
Risks, criticisms, and how to mitigate them
The biggest headline criticism is centralization. Because only the federation can sign blocks, a compromised functionary could, in theory, stall or censor transactions. In practice, the 11‑of‑15 multi‑sig rule makes a single breach unlikely to affect overall security.
Another friction point is the peg‑in delay. Users often forget the 102‑confirmation rule and expect L‑BTC instantly. The workaround is to plan peg‑ins ahead of major trades and use the wallet’s “batch peg‑in” feature to lock multiple BTC at once.
Liquidity can dry up during network spikes, leading to occasional peg‑out delays (about 5.7 % of requests in high‑load periods). Keeping a small on‑chain BTC reserve as a backup mitigates this risk.
Future roadmap and upcoming upgrades
Blockstream announced Liquid v2 with Schnorr signatures in May 2024. Schnorr will cut transaction sizes by roughly 25 % and improve privacy by allowing signature aggregation.
Other roadmap items include:
- Full RGB integration (target Q1 2025) - unlocking more complex smart‑contract‑like behavior.
- Taproot‑based assets (Q4 2024) - adding native support for Bitcoin’s latest script upgrades.
- Expanded federation: 73 members as of April 2024, adding institutions like Swissquote and Coinbase Prime for geographic diversity.
Analysts expect the total value locked to hit $3.5 B by 2026, driven by institutional demand for private, fast Bitcoin settlement.
Quick Takeaways
- Liquid offers 1‑minute block times and confidential transactions, ideal for large‑scale trading.
- The 1:1 peg ensures L‑BTC is always fully backed by BTC, but peg‑in takes ~17 hours.
- Federated consensus trades some decentralization for speed and regulatory friendliness.
- Competing solutions (Lightning, RSK) serve different niches; choose based on your priority: micropayments, smart contracts, or institutional privacy.
- Upcoming Schnorr and RGB upgrades will keep Liquid relevant as Bitcoin evolves.
Frequently Asked Questions
What is the difference between L‑BTC and regular BTC?
L‑BTC is Bitcoin that lives on the Liquid sidechain. It’s created when you lock BTC on the mainchain (peg‑in) and destroyed when you move it back (peg‑out). The value stays 1:1, but L‑BTC enjoys faster, private transfers.
How secure is the federated model?
Security comes from two layers: Bitcoin’s proof‑of‑work secures the locked BTC, and the 11‑of‑15 multi‑sig rule makes it hard for a single attacker to compromise the network. So far, no successful breach has been reported.
Can I use Liquid for everyday purchases?
Practically no. Liquid targets high‑value, institutional trades where speed and privacy matter. Merchants would need to accept L‑BTC and handle peg‑outs, which adds friction for small‑scale purchases.
What wallets support Liquid?
Blockstream Green (mobile & desktop), Jade hardware wallet, and the web‑based AQUA are the most widely used. All three support peg‑in/peg‑out flows and confidential transactions.
Will Liquid survive if Bitcoin adds its own confidential transactions?
If Bitcoin integrates confidentiality natively, Liquid may lose one of its unique selling points. However, its token‑issuance framework and institutional federation would still provide value, so many analysts expect it to adapt rather than disappear.
Marina Campenni
October 18, 2025 AT 09:20I appreciate the thorough overview of Liquid; the guide clearly outlines the benefits and trade‑offs for traders and developers alike.
Irish Mae Lariosa
October 20, 2025 AT 16:53The Liquid Network, while marketed as a solution for institutional speed and privacy, suffers from several fundamental drawbacks that cannot be ignored. First, the federated consensus model introduces a centralization risk that undermines the very ethos of Bitcoin. Second, the 102‑confirmation peg‑in delay renders the network unsuitable for time‑sensitive strategies that demand rapid entry. Third, the reliance on a limited set of functionaries creates a single point of failure should any of them be compromised. Fourth, the confidential transaction technology, though innovative, adds computational overhead that may affect throughput under heavy load. Fifth, token issuance via RGB, while promising, remains nascent and may not achieve the desired security guarantees. Sixth, the fee structure, albeit low, can become disproportionate for micro‑transactions. Seventh, regulatory scrutiny of federated sidechains could lead to future compliance burdens. Eighth, the network’s governance model lacks transparency compared to open‑source projects. Ninth, the requirement to run a full node, though optional for most users, imposes a barrier for widespread adoption. Tenth, the scarcity of liquidity providers outside a few major exchanges limits market depth. Eleventh, operational costs for institutions to maintain on‑chain reserves increase overall expense. Twelfth, the peg‑out process, while faster than peg‑in, still depends on the health of the federation. Thirteenth, any failure in the 11‑of‑15 multi‑sig threshold can stall the network entirely. Fourteenth, the roadmap’s ambitious upgrades, such as Schnorr integration, may introduce unforeseen bugs. Fifteenth, the competitive landscape with Lightning and RSK offers alternative solutions that may outpace Liquid’s development. In summary, while Liquid presents a compelling set of features, its centralization, latency, and operational complexities constitute serious limitations for many potential users.