Bitcoin was the world’s first decentralized cryptocurrency and today it remains one of the top from its area. It becomes a more popular method of payment with each passing year. Therefore, the bitcoin transfers start to become a part of reality.
Although it’s not widely accepted or commonplace yet, most people have at least heard of bitcoin. If you’re interested in mining bitcoin or accepting bitcoin payments, you’ll need to understand how to transfer bitcoins. Otherwise, you may end up confused. There are a few key differences in bitcoin transfers compared to online money transfers that you must know.
What Are Bitcoin Transfers?
A bitcoin transfer is the sending of bitcoin currency from or to an electronic bitcoin wallet. It’s similar to transferring money from your Paypal to your bank checking account. Bitcoin is a cryptocurrency, so the technicalities are different. But its essence is still a transfer of money from one account to another. The history of each bitcoin transaction can be backtracked to where it was produced.
How safe bitcoins are is a common concern people who are new to cryptocurrencies have. Bitcoins are digitally signed to improve their security. However, just as with paper currency, it’s possible for them to be stolen. In general, bitcoin transfers are as secure as other online money transfers.
Who Uses Bitcoin Transfers?
Individuals and businesses that have decided to accept bitcoin payments and use bitcoin transfers. As cryptocurrency gains in popularity, it gradually becomes more accepted as a payment method. More and more companies choose to accept BTC payments. A downside of this for the company is they may end up selling their product cheaper sometimes. This is due to the fluctuating value of bitcoin. Of course, the product is also sometimes sold higher than it’s listing price when BTC is worth more.
Examples of big name companies that accept bitcoin as payment include Subway, WordPress, Whole Foods, Home Depot, Overstock, and Rakuten. This is beneficial for individuals who mine BTC. This way, they can save cash while choosing to pay in bitcoin whenever possible. Some small businesses allow bitcoin as payment too. They often make use of QR codes to easily transfer bitcoin.
How to Complete Bitcoin Transfers
You need a bitcoin address and a private key to transfer bitcoins. Your bitcoin address is generated randomly and it is visible to others. However, your private key is only known only by you. A private key is basically your password. No one can access your bitcoins unless they know the private key. Whenever you want to send bitcoins to someone, you must enter your private key to complete the transaction. Once you send bitcoin to someone, it goes through the wider bitcoin network where it must be verified by miners. This means how long it takes a bitcoin transfer to clear depends on how long it takes miners to verify the transaction. It usually only takes 10 minutes to verify.
A few stores accept bitcoin payments immediately without waiting for verification. As you would expect, these stores sell goods at a low cost. You’re probably not going to find a higher priced item that accepts bitcoin payments instantly. You may also want to transfer money with bitcoin internationally. To do this, you can use some banks and international money transfer sites like Cryptopay. Why would someone want to transfer money with bitcoin? Because sometimes you can save money on the transfer by using bitcoin.
4 Details You Need to Know for Successful Bitcoin Transfers
1. Bitcoins Don’t Have a Physical Form
They don’t even exist in your digital wallet. A bitcoin address doesn’t have digital bitcoins in it. You’re probably wondering how to transfer bitcoins if they don’t exist in a physical form you can point out and identify as a bitcoin. There are records of transfers between bitcoin addresses. Balances increase and decrease accordingly. Each bitcoin transaction is also recorded in the block chain, which is a vast public ledger. You can determine the balance of a bitcoin address. For this, you need to look at the block chain because the information is not stored on the address.
2. Each Bitcoin Transaction Comprises 3 Pieces of Information
These are input, output, and amount.
- Input is a record of the bitcoin address that sent bitcoins to the sender.
- Output is the new recipient’s bitcoin address.
- Amount is how much bitcoin is being sent.
3. They Don’t Automatically Combine in Your Wallet
You need to be aware of this fact when managing your bitcoins. Each shows as a different transaction record. This matters because transactions can’t be split into smaller amounts. For example, if you want to send 1.5 bitcoins to someone but you received 3 bitcoins from another person, you can’t send just 1.5 bitcoins. You will have to send all three.
The way around this is to send 1.5 bitcoins to the person you want to receive it and the remaining 1.5 bitcoins to yourself via another bitcoin address. Your bitcoin wallet automatically does this for you.
4. You Should Know How to Transfer Bitcoins to Bank Account
This applies to the time when you don’t want to store it in your bitcoin wallet. Keep in mind that when you transfer bitcoins to your bank account, they will convert into your country’s currency. In order to transfer BTC to your bank, you need to go through a trusted exchange. This can be Coinbase or Bitstamp. It’s very easy to transfer money to your bank account from one of the exchanges. The process is similar to sending money from your bank account. Each exchange will outline the exact instructions on their website on how to transfer bitcoin to bank account.
Flipping the Coin
When you’re new to BTC, it’s not always obvious how to transfer bitcoin to bank account. But bitcoin transfers aren’t that much different from a transfer of cash online. You’re just dealing with different metrics and a currency that greatly fluctuates in value. One month, you could buy a product at a steal with bitcoin. But another month it would be overpriced. Bitcoin’s fluctuations in value can allow you to internationally transfer money with bitcoin at a lower cost than with cash too.
Was this guide on how to transfer bitcoins helpful? Is there anything you’re still confused about? Leave us a comment below.
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