Last week we talked about how Bitcoin transactions work. Today we’re going to take a closer look at sending bitcoin to somebody else, or how to pay someone with bitcoin. The same process is also used for moving or selling your own bitcoin.
1. To purchase something using bitcoin as the payment currency. 2. To donate money to a crypto-friendly charity. 3. To remit funds to friends or family around the world. 4. To tip or subscribe to a livestreamer on a platform like Twitch or dLive. 5. To move your bitcoin from one wallet or account to another. 6. To cash out your bitcoin at select Bitcoin ATMs.
In order to send bitcoin to another person or another wallet, you need the public bitcoin wallet address of the receiver. You don’t need the private keys, passphrase or seed phrase for the other wallet, and those should be kept private by the owner at all times.
The public bitcoin address is a string of 34 letters and numbers, but most bitcoin wallets also represent it as a QR code. So, the person (or machine) receiving the bitcoin can also show a QR code that the sender can scan with their own mobile wallet app.
While every wallet app will be a little bit different, this is basically how the process goes:
1. Open your bitcoin wallet, click on “Send” and choose the currency if there’s more than one option. 2. Paste the receiving bitcoin wallet address in the “To” field, or scan their QR code. 3. Enter the amount you’re sending. 4. If applicable, choose your Transaction Fee setting. Regular fees cost less but take longer whereas Priority fees cost more but finish faster. 5. After verifying that everything is correct, choose “Send Bitcoin.”
After you send the funds, the transaction goes to the blockchain network where it’s verified and confirmed by Bitcoin miners. This is where the priority fees come in … a miner will give first dibs to a higher-paying transaction, just like a bartender will fast-track service for the customer who is tipping the most. So, if the network is particularly busy, or you need the money to go through stat, offering a higher fee will speed up your transaction. But if you’re not in a big hurry, you’ll probably choose not to pay extra.
It takes about 10 minutes to create a new block on the blockchain, and each block is made up of multiple transactions. So, if a miner gets to your transaction right away, you’re looking at 10 minutes for everything to complete.
More realistically, if other people are paying higher fees and/or if the network is busy, it could take longer. And some platforms require more confirmations, most commonly three or six, which could take an hour or more.
As I mentioned earlier, the process is the same if you’re cashing out your bitcoin at a Bitcoin ATM. In this case the machine is the recipient, so you scan the machine’s QR code to send your funds to the BTM, which will then dispense your cash.
1. Most Bitcoin ATMs (about 80%) do not allow you to cash out. They only let you buy Bitcoin, but not sell it. 2. Coin Cloud operates over 60% of the two-way BTMs in the USA. Every single Coin Cloud machine lets you cash out, which no other national company can claim. 3. If you use a Coin Cloud Bitcoin ATM to cash out your bitcoin, you can speed up the process and make it much easier by setting up your sell in advance. Using the Coin Cloud Wallet app you can choose your BTM, let the app automatically enter your total instead of manually typing it, and reserve your cash for up to 48 hours. When you arrive at the machine, the cash is ready to go with no further wait time. 4. It’s not just Bitcoin … Coin Cloud machines also let you buy and sell 30 other virtual currencies.
Disclaimer: The information and views supplied on the Coin Cloud blog are for educational and entertainment purposes only. We are not financial advisors, so please do your research and consult with a trusted financial specialist before investing your money.
Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) operator. With over 4,500 locations nationwide, in 48 states and Brazil, Coin Cloud operates the world’s largest and fastest-growing network of 100% two-way DCMs, a more advanced version of the Bitcoin ATM. Every Coin Cloud DCM empowers you to quickly and easily buy and sell over 40 cryptocurrency options with cash.
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