Sending and Receiving Bitcoin

While Bitcoin transactions may seem straightforward to users, the process involves multiple steps in the background. However, you don’t need to worry about the technical aspects – Bitcoin wallets and the network handle everything automatically. In just a few minutes, you can send or receive Bitcoin seamlessly.
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In this lesson, we will walk through the steps of sending and receiving Bitcoin.

Contents

• What do you need to perform Bitcoin transactions?
• How to send Bitcoin?
• How to receive Bitcoin?
• Transaction time and fees

What Do You Need to Perform Bitcoin Transactions?

Before making Bitcoin transactions, you need to set up a wallet and generate a wallet address. We’ve covered these topics in previous lessons, but here’s a quick recap.
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Just as you need a bank account to store, send, and receive fiat money, you need a Bitcoin wallet to manage your cryptocurrency transactions.
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A crypto wallet is a software application or physical device that allows you to send, receive, and store crypto assets. There are different types of wallets, and we’ve previously explored their features, security, and best storage practices.
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To send Bitcoin, you must have a recipient's wallet address, which is generated within a Bitcoin wallet. A wallet address can appear as an alphanumeric code or a QR code.

How to Send Bitcoin?

To send Bitcoin, follow these steps:
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1. Enter the recipient’s Bitcoin address in your wallet.
2. Specify the amount of Bitcoin you want to send.
3. Choose a transaction fee, which determines processing speed (explained later).
4. Confirm and sign the transaction by entering your private key or password.
5. The transaction is broadcasted to the Bitcoin network for verification.

Once the Bitcoin network confirms the transaction, it cannot be canceled or reversed. That’s why it’s essential to double-check the recipient’s address and the amount before proceeding.
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Your wallet must be connected to the internet to send Bitcoin. Once the transaction is broadcast, nodes (computers in the Bitcoin network) verify whether the sender has enough Bitcoin and confirm the transaction’s validity.
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If the majority of nodes approve the transaction, the transaction is recorded on the blockchain and the Bitcoin is successfully transferred to the recipient’s wallet.

How to Receive Bitcoin?

To receive Bitcoin, all you need to do is provide your wallet address to the sender.
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After the sender processes the transaction, wait for confirmation to ensure that the Bitcoin appears in your wallet.

Transaction Time and Fees

One of Bitcoin’s major advantages over traditional banking is its ability to send money globally with minimal fees.

How Bitcoin Fees Work

Unlike banks that charge a percentage-based fee for transactions (often 3% or more for cross-border payments), Bitcoin transactions generally have very low costs. However, the fee structure depends on network activity and congestion.
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Bitcoin’s network can process only a limited number of transactions at a time. When demand is high, transaction fees and wait times increase.
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Think of it like purchasing movie tickets – your seat depends on how much you’re willing to pay. Similarly, in Bitcoin’s network, transaction fees determine how quickly your transaction is processed.
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Miners prioritize transactions with higher fees. If you set a low fee, your transaction might take longer to be confirmed. If you pay a higher fee, your transaction is processed faster.

How Long Do Bitcoin Transactions Take?

• On average, a Bitcoin transaction takes between 10 minutes and an hour to be confirmed.
• Bitcoin fees are measured in satoshis per byte (satoshi/Byte), where one satoshi is 0.00000001 Bitcoin (BTC).
• Depending on network congestion and urgency, Bitcoin transaction fees typically range from $0.05 to $100.

Conclusion

Sending and receiving Bitcoin is simple for users, but it involves a complex process in the background. By understanding how transactions work, how to verify addresses, and how fees affect speed, you can ensure smooth and secure Bitcoin transfers. 

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