How do you send bitcoins?
Fortunately, just like sending NSFW selfies, sending bitcoin is a pretty simple process.
In order to send or receive bitcoins, you need a “wallet”.
The exact process for sending bitcoins will depend on the type of Bitcoin wallet that you’re using, but the main thing you’ll need is the “‘address“‘ of the recipient.
Similar to an email address, the address specifies the location to which bitcoins can be sent.
A Bitcoin address is an alphanumeric string (a string of letters and numbers).
Here are some examples to give you an idea of what they look like:
- 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF
- 34xp4vRoCGJym3xR7yCVPFHoCNxv4Twseo
- bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6
A transaction is a single instance of bitcoins being sent to a specific address
So all transactions are associated with an address.
How do I send bitcoin?
Here’s a step-by-step guide on how to send bitcoin:
Step 1: Create a Transaction
To send bitcoins, you enter the recipient’s address by simply copy-and-pasting it in the wallet app.
If you’re using a mobile wallet or app, and you’re physically in front of the recipient, you can just ask for their QR code, which is just a graphical representation of the address.
It’ll look something like this:
Then, you can use your phone’s camera and scan the QR code.
Keep in mind that all Bitcoin transactions are irreversible. This means that if you send them to the wrong address, you’ll most likely never see that bitcoin again. So always make you’re sending to the correct address!
Once you’ve entered the recipient’s address, you enter the amount of BTC you’d like to send.
Make sure you are using the correct currency. You don’t want to accidentally send 100 BTC when you meant 100 USD!
And then you click or tap “Send“. Congratulations! You’ve created a transaction!
Step 2: Sign a Transaction
After you’ve created a transaction, your wallet software will ask you to confirm the transaction and/or ask for your password.
Clicking “Confirm” or entering your password is what allows your wallet to use your private key to “sign” the transaction.
Once “signed“, your wallet will broadcast the transaction, along with this “digital signature”, to the Bitcoin network.
When you say you are “sending bitcoin”, what you’re actually doing is sending a (digitally) “signed” message to the Bitcoin network authorizing the movement of a specific amount of bitcoin from your wallet address to the seller’s wallet address.
Step 3: Broadcast a Transaction
In order to broadcast a transaction, your wallet will need access to the Bitcoin network.
A wallet is not a node, it is an interface for interacting with a node.
So your wallet uses the internet to connect to a Bitcoin node and sends your transaction to it. Once the node validates your transaction, it will then broadcast the transaction to other nodes.
Once a transaction is sent, it will appear as “pending“.
Your wallet will inform you when your transaction has been “confirmed”.
What’s a Bitcoin network fee?
All Bitcoin transactions must pay a fee to be included in the blockchain.
This fee is known as the”network fee” or “transaction fee“.
Network fees are fees paid to the miners for processing Bitcoin transactions.
Are you wondering, “WTF are miners?” If you’re not familiar with what miners are, I recommend reading my “Beginner’s Guide to Bitcoin Mining”.
Many Bitcoin wallets allow you to customize the Bitcoin network fees you pay when you send bitcoin.
Transactions with higher fees attached to them are prioritized by miners, so transactions with higher network fees attached are more likely to be included in the next batch, or ” block” of transactions that are added to Bitcoin’s blockchain.If you’re in a rush, you can “expedite” your transaction processing by paying a higher fee.
If you’re not in a rush to have your transaction confirmed, you can save money by paying a lower fee. If you set the fee too low though, your transaction may take hours or even days to be confirmed.
In the worst-case scenario, you’ll have to wait 72 hours until the transaction is canceled. But once the transaction is canceled, you’ll get your bitcoins back.
Most wallets select the network fee automatically to help you avoid waiting for too long for confirmation of your transaction.
If you want to ensure that your Bitcoin transactions are confirmed in a timely manner, use the recommended network fee amount that your wallet provides.
A Bitcoin transaction typically takes anywhere from 10 minutes to several hours to be confirmed.
How do I know if a Bitcoin transaction is completed?
If you’d like to know the status of a transaction, you can use something called a “Block Explorer“.
It’s an online tool for exploring the blockchain of a cryptocurrency, where you can watch and follow…live…all the transactions happening on its blockchain.
Think of a Block Explorer as a search engine for a blockchain. It allows you to explore current and historical data related to transactions.
To check the status of an outgoing transaction, all you have to do is enter the recipient’s address or transaction ID in the Block Explorer’s search field.
For Bitcoin, examples of popular Block Explorers are Blockchain.com, Block stream Explorer and BlockCypher.
Most wallets will actually include a link to a Block Explorer in your transaction history. If you click on the transaction link, you’ll be able to see your transaction’s status on the blockchain.