Have you ever wondered giving someone Bitcoin but are not quite sure how to get started? Or maybe you got Bitcoin as a gift from someone, but don’t really know how to safely go about moving it. Well if so, this post is for you.
As I expressed in How To Pay With Bitcoin, the process of sending Bitcoin is one of the most daunting things for people entering the space and wanting to transact for the the very first time. For the most part it’s a fairly simple process, but like anything, there is a learning curve and some cautionary initiation memos best not learned the hard way.
It goes without saying that in order to send Bitcoin, first one must get Bitcoin. There are actually quite a few ways to get Bitcoin, but before delving into that, its important to understand that for the most part a Bitcoin or Bitcoin compatible wallet is necessary. If you don’t already have one of these, I recommend you check out The Complete Guide To Bitcoin Wallets for suggestions on some of the better known ones in the space. If you are completely new to the space, then it might be worth your time to check out ‘How to Create Bitcoin Wallet’ tutorials to get a general feel for things before you have a go at it for yourself. Once you have a wallet, then comes the time to get some Bitcoin to put in it. Should you feel hindered at this step as well, don’t fear as I got you covered. Just head on over to How To Get Bitcoins for an extensive overview of options on this front.
So, now that you have got yourself a Bitcoin wallet and an idea of how to stock it up with some Bitcoin, before you go any further it would be good to take a step back and understand the technicals behind how Bitcoin and other cryptocurrency wallets work in terms of public and private key pairs.
Every Bitcoin and cryptocurrency wallet will have at least 1 private and public key pair. “A private key in the context of Bitcoin is a secret number that allows bitcoins to be spent. Every Bitcoin wallet contains one or more private keys, which are saved in the wallet file. The private keys are mathematically related to all Bitcoin addresses generated for the wallet” ([source]](https://en.bitcoin.it/wiki/Private_key)). “A Bitcoin address, or simply address, is an identifier of 26-35 alphanumeric characters, beginning with the number 1, 3 or bc1 that represents a possible destination for a bitcoin payment” (source).
Essentially then, when you want to receive Bitcoin it is necessary to send someone your Bitcoin or Public address. When you want to send Bitcoin, you need the Bitcoin or Public address of that person in order to send the transaction. IF ANYONE EVER ASKS YOU FOR A PRIVATE KEY, DO NOT, UNDER ANY CIRCUMSTANCES, GIVE IT TO THEM. Anyone with access to your private key is seen by the blockchain as the owner of the address and can send Bitcoin to an address out of your control, and there is really nothing you can do about it once the transaction has been confirmed.
In order to send Bitcoin to another wallet you will need:
A Bitcoin or Bitcoin compatible wallet that you control with a Bitcoin balance inside
The PUBLIC ADDRESS of the wallet you want to send Bitcoin to
It does not matter what wallet the other person uses. By using the PUBLIC ADDRESS attached to the PRIVATE KEY of any account, the Bitcoin will be sent. Should the Bitcoin PUBLIC ADDRESS be incorrect, the Bitcoin will be lost. In addition, if you try to send Bitcoin to an Ethereum address for example, the Bitcoin will also be lost. IT IS VERY IMPORTANT THAT YOU DOULBE CHECK THE PUBLIC ADDRESS THAT YOU ARE SENDING BITCOIN TO WITH THE UTMOST CARE. Many a Bitcoin have been lost due to careless or speedy sending.
Bitcoin Addresses or Public Addresses can be represented in two main forms:
An alphanumerical string of case sensitive numbers and letters
A QR code
Image Source: https://coinrevolution.com/top-5-paper-wallets/
A you can see from the image of a Bitcoin paper wallet above, the left side shows both the QR code and Public Address needed to receive Bitcoin transactions for this account. The right side shows the Private Key for the Bitcoin account – remember – that key that you are never suppose to share with anyone.
It should be noted that although all wallets – whether they be paper, digital, mobile, and even hardware wallets – will show you the alphanumeric Bitcoin Public Address, depending upon which wallet you are using, the QR code may or may not be shown. Thus, the process of sending Bitcoin to someone else, another wallet in your possession, or even to an exchange will depend upon what information you have. It is however not advisable to type in the Bitcoin Public Address from a keyboard or keypad on a computer or mobile device. One wrong letter or miss of a capital and poof – that Bitcoin is likely never to reach it’s intended destination and will be gone for good.
In other words, when you use a the Bitcoin Public Address to send Bitcoins, use a copy and past function on your computer or mobile device and double check what is on the screen letter by letter before you hit the send button. For extremely large transactions it is best to send a small test amount to make sure the transaction gets to where you want it to be before sending the larger balance. Always best to be overtly cautious in matters such as these I reckon.
When it comes to sending Bitcoin via QR code, it really is as straight forward as it sounds. Of course different mobile wallets will have slightly different menu options, but the process by and by will resemble itself across most wallets that allow for the sending of Bitcoin using a QR code.
Sending Bitcoin or other cryptocurrencies to an exchange is much the same process as sending Bitcoin to another wallet. In order to illustrate this process, lets run through the example of sending Bitcoin to Binance Exchange.
First you will need to log into your Binance account by clicking the login tab in the top right. Of course, if you do not yet have a Binance account you will have to create one. It’s pretty simple really, as all that is needed is an email, password, and optional referral id.
After you have logged in, navigate to the wallet tab and click on Deposit.
This will prompt you to choose which coin you would like to deposit. PLEASE REMEMBER THAT YOU CAN ONLY DEPOSIT BTC (BITCOIN) INTO A BTC (BITCOIN) WALLET ADDRESS. This is very important as if you try to deposit Bitcoin (BTC) into another currency wallet address, the Bitcoin will be lost. Also, keep in mind that although there is only one Bitcoin, there are other currencies such as Bitcoin Cash and Bitcoin Gold, so make sure you read carefully and double check that you have correct wallet address before proceeding.
From here there a couple of options available.
Copy the BTC or Bitcoin address and paste it into the ‘send to’ address in your personal wallet or other exchange platform that you are using to send the Bitcoin from. Don’t forget to double check the address and make sure it is correct before you proceed with the transaction to send from your other wallet/exchange account.
Click on the link to “show QR code” and scan this with your mobile wallet. Again, don’t forget to double check the deposit address is correct before you proceed to send your BTC/Bitcoin.
Please Note: for some other assets you will need to also fill in the “tag” section of the transaction details. Read the deposit information on the deposit window carefully and follow them exactly, especially if it is your first time. In some other exchanges such as KuCoin or Huobi for example, the “tag” may show as “Memo” or “Payment ID”.
After you have sent Bitcoin from another wallet to your Binance account, you can check the status of any deposit you have made by clicking on the “TxID”.
*All marked images taken from the official Binance support article How to Deposit to Binance. For those wanting more information on depositing other coins that need a necessary “tag”, please refer directly to the above link.
As you may have already guessed by my constant harping about the necessity to make sure that you send Bitcoin only to a Bitcoin wallet address, it is not possible to send money to a Bitcoin wallet. You can however send money to a Bitcoin exchange so that you can purchase Bitcoin and other cryptocurrencies, as well as send dollar values of Bitcoin to some else.
To send money to an exchange you will first need to connect said exchange to your bank account. This will in most cases require you to submit documents for a KYC (know your customer) to the exchange and to the bank your would like to transfer money from. This will depend entirely upon the country/jurisdiction you reside in and the bank and exchange you choose to use. In my experience all you really need is one, and should you choose hit up a Bitcoin ATM or go the OTC (over the counter) route such as purchasing through localbitcoins, you may not even need to worry about linking a bank account. For those interested in more on the subject please check out my previous posts How To Get Bitcoins and Bitcoin Machine Near Me?!?
On a side note, many exchanges these days do offer users the ability to purchase Bitcoin and other cryptocurrencies via credit and debit cards. That said, I personally would advise against this if you have other options. Not only is it risky to send money you don’t have to an exchange to purchase volatile assets such as Bitcoin and other cryptocurrencies, but even if you intend to pay the balance of the credit card off right away or use a pre-paid debit card, you will be charged a fee from your card carrier company which in some cases can add up to quite a bit. Just think of it like this, the less you pay in service fees to the plastic card providers, the more Bitcoin you can acquire.
Despite the high fees and limited amount of exchanges available for Bitcoin to PayPal transactions, there are always people who inquire about sending Bitcoin to PayPal and PayPal funds to Bitcoin. Again, although it is not actually possible to do this, it is possible to use a 3rd party exchange to enable users to transfer funds between their Bitcoin wallets and PayPal accounts. Being as this is something that I rarely do because of the aforementioned reasons, it best to point you in the direction that best serve your interests in this matter. According to 99 Bitcoins Buying Bitcoin with PayPal (Beginners Guide), eToro, LocalBitcoins, xCoins, and Paxful all allow for the purchasing of Bitcoins with PayPal. As noted in the article, “There’s still no easy process that allows you to buy actual Bitcoins (not price speculation) with PayPal. My personal suggestion is to use a different payment method if possible. If you have to use PayPal, the methods listed here will work, but get ready for some hefty fees.” Should you still wish to give it a try, I suggest you check out the 99 Bitcoins link guiding you through the various exchanges, as it really is quite detailed and will guide you through the process on each exchange step by step complete with pros, cons, screenshots, and applicable warnings.
One of the largest barriers to feeling safe when sending Bitcoin is the long and complicated string of alphanumeric letters and numbers that make up the Bitcoin Public Address. Mix this with the incredibly and notoriously slow transaction speeds on the Bitcoin network and even the most seasoned of Bitcoiners will sometimes let their nerves get the best of them while constantly checking the transaction log. In laymen’s terms, one of the earliest revolutions in sending Bitcoin came in the form of utilizing an email address in place of the alphanumeric Public Address. Although this method has largely fallen to the wayside since the inception of mobile wallets which enabled the scanning of QR codes, there are a few services such as CoinBase and Luno where sending Bitcoin to email addresses can still be performed. It should be noted that the CoinBase email transfer via email seems to be limited to internal wallet transfers only. In regards to Luno, “Sending Bitcoin to someone with a Luno wallet using their email address or mobile number makes the transaction instant and free (if they don’t have a Luno account, they’ll be asked to create one)” (Luno Help Centre: How Do I Send Cryptocurrency?).
And that pretty much wraps up the basics of sending Bitcoin. Thanks as always for droppin’ on in, and do stay on the top of your game, whatever that may be, until we have the pleasure once again.
Jimmy D
Image Source
**Please note: Although I have to the best of my ability done my due diligence in researching this piece, I am not a financial advisor and assume no responsibility for any losses incurred on the readers part for any investments or products supported obtained from this post. Please understand that it is the readers responsibility to look after and maintain their own finances and perform all due diligence on their own part for their personal and financial well being and safety and not rely on myself or others in this space to keep them safe. In addition, although I have done my best to only include what appear to be legitimate sources and projects, due to the sheer volume and scope of projects in this post, unfortunately I have not personally had either the time or the resources available to verify the validity of all the projects mentioned, so please do be sure the do your due diligence before embarking on using or sending money to any of the above projects or companies.
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