Now that you’ve bought and sold some Bitcoin, it’s time to learn how to do something a bit different — send Bitcoin.
Bitcoin (BTC) is a peer-to-peer electronic cash system that does not require an intermediary, enabling users to transact directly across borders. To send Bitcoin, users need to become comfortable with the basic infrastructure that is required for Bitcoin transactions.
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Bitcoin Wallets
To send Bitcoin (BTC), users require a Bitcoin wallet, a tool for interacting with the Bitcoin blockchain.
While it’s common to speak metaphorically of Bitcoin wallets “storing” users’ cryptocurrency, it’s more accurate to understand that Bitcoin wallets are used to generate the information that is required to send and receive cryptocurrency via blockchain transactions.
There are three main types of Bitcoin wallets — software, hardware and paper — which differ in their functionality and security. Depending on whether or not a Bitcoin wallet is connected to the internet, it is also further categorized as either a “hot” or “cold” wallet.
A user might wish to send Bitcoin to another user as a form of payment or trade, or they might want to send Bitcoin between the different Bitcoin wallets that they themselves use for various purposes (i.e. for trading cryptocurrency or for HODLing).
Any wallet can be used to send Bitcoin to any other wallet address — software, hardware or paper — as long as it that address is specifically a Bitcoin wallet and not a wallet designed for a different cryptocurrency, e.g. Ethereum (ETH), Bitcoin Cash (BCH) or XRP.
How to send Bitcoin From Binance
There are currently two ways to send Bitcoin on Binance – Peer-to-peer (P2P) and Binance wallet.
Sending Bitcoin or other cryptocurrencies via P2P is fee-less on Binance. Buyers and sellers transact directly with one another without intermediaries, in a secure and private manner. No personal information is needed to make a P2P transaction with other buyer/seller. Instead, the email address used to sign up with Binance or QR code is used.
Let's take the example of sending Bitcoin using email address. After opening your P2P wallet, select "Transfer between accounts" and "Send". Then, input the email address associated with the recipient's Binance account. Select the cryptocurrency and amount you wish to send, enter the validation code and you're set.
Now, let's look at receiving Bitcoin using QR code. After the same first step, select "Receive". Then, simply save and share your QR code with the sender to receive the funds within seconds.
If you would like to withdraw Bitcoin from Binance to another wallet, you can do so by selecting "Wallet" and "Withdraw". Choose the cryptocurrency you want to withdraw, paste the wallet address you would like to withdraw to, and select the network. Make sure that the selected network is the same as the network of the platform you are withdrawing funds to, otherwise the funds would be lost.
How to send Bitcoin From Coinbase
There are two types of ways you can send Bitcoin on Coinbase – on-chain sends and off-chain sends.
Off-chain sends can be used when you are sending to a crypto address that belongs to another Coinbase user that has opted for Instant send. These are instant and fee-less. On-chain send occurs on the blockchain and will incur network fees.
To send, click "Pay", select "Send" and enter the amount you would like to send. Then, input the crypto address, phone number or email address of the recipient. Select "Continue", choose "Preview" and finally, select between "Send on Coinbase" and "Send on the Blockchain". The former is off-chain while the latter is on-chain.
To receive, you can simply share your wallet address, or allow the sender to scan your QR code.
Sending Bitcoin: Some Important Pointers
The exact process of sending Bitcoin will vary according to the type of wallet and wallet provider you choose to use.
In all cases, you will need to define the amount of Bitcoin you wish to send, using the interface provided — whether it’s a mobile app, desktop application, web browser or Bitcoin ATM.
How to Send Bitcoin to Someone
You will also need to know or have access to the recipient’s wallet address, which you enter as a destination address for the transfer.
Note that a single user can use their Bitcoin wallet to generate multiple new wallet addresses, each of which is paired to their unique private key. This private key remains constant and should be kept strictly confidential, whereas an associated wallet address will be publicly visible to anybody on the Bitcoin blockchain.
In order to simplify the process, some software (and paper) wallet providers enable users to scan a QR code to access the recipient’s address. Some wallet providers even allow users to enter an email address that is tied to the recipient’s wallet address.
If a QR code or email is not supported, you will need to carefully check the alphanumeric characters that comprise the recipient’s Bitcoin address to ensure the information is correct — just as you would if sending to someone else’s bank account.
How to Transfer Bitcoin Between Exchanges
Note that when the same user sends Bitcoin between two software wallets that are hosted on a cryptocurrency exchange — e.g. between their Coinbase and Coinbase Pro Bitcoin wallets — the send Bitcoin function might be referred to as a deposit/receive Bitcoin function.
How to Send Bitcoin to a Hardware Wallet
When it comes to sending Bitcoin from a hardware wallet — for example a Ledger Nano S — users will typically be required to use a desktop application that allows them to interface with the hardware device.
One variable to note when it comes to sending Bitcoin is that users are sometimes able to choose how high the transaction fee for the transfer will be. Typically, the lower the transaction fee, the longer it will take for the Bitcoin transaction to be confirmed on the Bitcoin blockchain.
How Long Does Bitcoin Take to Send?
On average, Bitcoin transactions take around 10 minutes. However, this could be affected by other factors such as the total network activity, hashrate and transaction fees. If the network is congested, there will be a backlog of transactions in the mempool. This would result users paying more in transaction fees to get transactions to go through faster. This occured in April 2021, where average Bitcoin transaction fees reached $59.
However, scaling solutions like the Lightning network are in place to bring faster transactions to the Bitcoin network, with lower fees. Lightning network is a layer 2 payment protocol that takes transactions off-chain. This would enable fast and scalable transactions, something that is touted as the solution to Bitcoin's scalability problem.
What Is a Mempool?
While investigating how Bitcoin transactions work, you may come across the term “mempool,” which is a shorthand for “memory” and “pool.”
A mempool is a record of all Bitcoin transactions that have not yet been validated by a miner and added to the next block on the blockchain. A mempool is temporarily stored on each individual node in the network, and, metaphorically speaking, functions as a kind of buffer zone or waiting room for pending Bitcoin transactions.
Mempool transactions are periodically cleared each time a new block is added to the blockchain. Pending transactions waiting in mempools will only be cleared (processed) once they meet the minimum transaction fee threshold.
