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 is what gives Bitcoin value. To send and receive bitcoin you need to have a wallet, and then you need to put in the public address of the sender and recipient. The process of sending and receiving bitcoin can differ between wallet to wallet, 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 For Sending: Enter the public address of the recipient and choose the amount to send. Once you decide the amount, confirm the amount to avoid mistakes, then click send transaction, and verify the transaction one last time for confirming your public address and sender's public address.
Step-5 For Receiving: To receive bitcoin, you need to share your public wallet address with the sender. Also, you can do this by letting them scan a QR code.
Alice wants to send five bitcoins to Ben. She may be sending five bitcoins because she may have bought a product or paying him for services. For Alice to be able to send those five bitcoins, she needs to have five bitcoins in her wallet, and she 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 you a public key which is used to receive bitcoins, and you have a private key which allows you to sign and authorize spending or sending those bitcoins to other people. We know that Alice has the private key to her wallet, so she is able to spend those bitcoins.
For Ben to receive five bitcoins, he needs to have a wallet of his own which allows him to got 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. For Ben to receive five bitcoins from Alice, he needs to provide his Bitcoin address to Alice. The bitcoin address is simply used for receiving money. The bitcoin address is a hashed version of your public key. Ben has the option to generate a new bitcoin address for every single transaction if he wants. That's actually a good security recommendation in terms of privacy.
Now, when Ben shares his bitcoin address, there are two things that can actually be shared. You can share an alphanumeric code which starts with the number one and ends in the letter H, and another is the QR code. The alphanumeric code will be completely different for every single bitcoin address, and these addresses are typically between 26 to 35 characters in length. These bitcoin address that you see often numerically is how Ben tells Alice where he can receive bitcoins from her.
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 the five bitcoins to be transferred over to Ben's Bitcoin address. So, a new transaction shows that from Alice's wallet five bitcoins are being sent to the Ben 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.