Sending and Receiving Bitcoin
Sending and receiving bitcoin is one of the core building blocks of any bitcoin application. Sending and receiving bitcoins securely over the internet gives you a bitcoin value. To send and receive bitcoin, you need to have a wallet where you need to put the public address of the sender and recipient. The process of sending and receiving bitcoin can differ between wallets to wallets, but the general steps are given below.
Step-1 Log-in into your wallet.
Step-2 Go to Send and Receive icon.
Step-3 Choose whether you want to send or receive bitcoin.
Step-4 Send bitcoin: Enter the public address of the recipient and choose the amount which you want to send. Once you decide the amount, confirm the amount to avoid mistakes, then click on send transaction, and verify the transaction one last time for confirming your public address and sender's public address.
Step-5 Receive bitcoin: To receive bitcoin, you need to share your public wallet address with the sender. You can also do this by letting them scan a QR code.
Alice wants to send five bitcoins to Ben. She is sending five bitcoins because she may have bought a product or paying him for services. For sending those five bitcoins, Alice needs to have five bitcoins in her wallet, and can also be able to receive bitcoins in her wallet. Now she could have bought bitcoins, or she could have received bitcoins as payment.
Here, we are assuming that Alice has 20 bitcoins in her wallet. When the wallet is created, it assigns two keys. One is the public key which is used to receive bitcoins. And second is the private key which is used to sign and authorize to send or spend those bitcoins to other people. We know that Alice has the private key to her wallet, so she is able to spend those bitcoins.
Ben can receive five bitcoins if he has a wallet of his own, which allows him to get bitcoins from anyone else. Ben also has a private key for his wallet that will enable him to spend those bitcoins that he has in his wallet. Ben's private key is completely different from Alice's private key. Now, if Ben wants to receive five bitcoins from Alice, he needs to provide his Bitcoin address to Alice. The bitcoin address is used for receiving money, which is a hashed version of the public key. Ben has the option to generate a new bitcoin address for every single transaction if he wants. Creating the new bitcoin address for every transaction is a good security recommendation in terms of privacy.
Ben can share his bitcoin address in two ways. He can share an alphanumeric code which starts with the number one and ends in the letter H, and another one is the QR code. The alphanumeric code is always different for every single bitcoin address, and these addresses are typically between 26 to 35 characters in length. The bitcoin address which you see numerically is the Ben address used to receive bitcoins from Alice.
Now, when Alice sends the five bitcoins to that address, she creates a transaction. She is able to do this transaction because she can access the private key and can authorize to transfer five bitcoins on Ben's bitcoin address. So, a new transaction shows that from Alice's wallet, five bitcoins are being sent to Ben's wallet. The transaction at that point gets sent out into the network, and the miners begin mining blocks. When the first block comes in and includes that transaction in it, then the transaction is said to be confirmed.
Next TopicConverting Bitcoins to Fiat Currency