Sending Bitcoin

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Learn how to securely send bitcoin

Sending bitcoin is as easy as choosing the amount to send and deciding where it goes.

The exact procedure for doing so will depend on the type of Bitcoin wallet you're using, but the main thing you need to know is the 'address' of the recipient. A Bitcoin address is an alphanumeric string that looks something like this:

3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy

Simply copy the recipient's address to your clipboard, then paste it in the send field of the Bitcoin wallet app you're using.

Bitcoin addresses can also be displayed in QR code format. If you're sending bitcoin from a mobile wallet like the Bitcoin.com Wallet, you can use your phone's camera to scan the QR code of the address you want to send to. This will automatically fill in the address.

As for the amount to send, most wallets allow you to toggle between showing the send amount as BTC or showing it in your local currency.

IMPORTANT: Bitcoin transactions are irreversible, so if you send to the wrong address, you'll most likely never see that bitcoin again.

Read more: Learn how to receive bitcoin securely.

What's the Bitcoin network fee?

Many Bitcoin wallets (including the Bitcoin.com Wallet) allow you to customize the Bitcoin network fees you pay when you send bitcoin.

Bitcoin transactions incur a small fee which is paid to the miners that confirm them. Transactions with higher fees attached to them are picked up sooner by miners (who optimize for profitability), so higher-fee transactions are more likely to be included in the next batch, or 'block,' of transactions that's added to the Bitcoin blockchain. This means you can opt for faster transaction processing by paying a higher fee. Alternatively, if you're not in a rush to have your transaction confirmed, you can save money by opting for a lower fee. However, you need to be careful because if you set the fee too low, your transaction may take hours or get stuck for days. Don't worry though, you're never in danger of losing bitcoin by setting the fee too low. In the worst case, you'll have to wait three days with your bitcoin in limbo until the transaction is cancelled, at which point you'll again have access to it.

How are Bitcoin fees determined?

Fees are measured in satoshis/byte. A satoshi is the smallest divisible unit of bitcoin, which is 0.00000001 BTC (a hundred millionth of a bitcoin). Each transaction is made up of data, which is measured in bytes. More complicated transactions involve more data and so are more expensive. Generally speaking, this means higher value transactions (involving more bitcoin) consume more data, and so require higher transaction fees. However, it's not exactly that simple. In fact, it's entirely possible for a 1 BTC transaction to require more data (and therefore higher fees) than a 0.5 BTC transaction. To understand why, we need to look in some detail at how the Bitcoin blockchain actually works.

The system runs on what's known as the Unspent Transaction Output (UTXO) model, which is an efficient and privacy-enhancing way to manage the Bitcoin ledger. It works like this:

At first, coins are minted through the mining process. These new coins form what's known as the 'coinbase.' Now imagine a miner, who has received the current 6.25 BTC block reward, sends 1 BTC to Alice. On the ledger, this actually appears as 6.25 BTC sent to Alice and 5.25 BTC sent back to the miner, leaving Alice with a balance of 1 BTC and the miner with a balance of 5.25 BTC. The system is analogous to paying for something using a cash note: if the cost of the item is $2.50, you don't cut a five-dollar note in half. Instead, you hand over the whole five-dollar note and receive $2.50 in change. In our example, the miner has sent over a 6.25 BTC 'note' and received 5.25 BTC in change. As it relates to fees, even though the amount of Bitcoin involved is signficant, the fee for completing the transaction will be relatively small because the transaction is relatively simple. That's because there's only one output (1 BTC to Alice) and it comes from only one input or 'note' (the 6.25 BTC coinbase transaction). If we think of notes as taking up space on the Bitcoin ledger, we can see that this transaction takes up the least amount of space (bytes) possible.

Why are some Bitcoin transactions more expensive than others?

Now let's imagine Alice buys one more BTC at a later date from a different miner. Alice will then have 2 BTC in her wallet, but each one will have originated from different 'notes.' In effect, this means Alice has two 1-BTC notes in her wallet. If Alice wants to send 2 BTC to Bob, she'll be sending those two notes. And since more notes means more data, and more data means higher cost, this transaction will be more expensive. Put another way, the transaction will consume more bytes so Alice will have pay more satoshis to convince a miner to include it in the next block.

For the average user, this means you'll end up paying significantly more for a transaction if it involves moving many notes. For example, imagine you've received a hundred small payments into your wallet over a period of months until you've accumulated one full bitcoin. Now, if you want to send that one bitcoin to someone else, you'll actually be sending 100 notes. This will incur significantly more fees than if you'd sent a single note as our miner did in the first example.

How do I set the BTC network fee in my Bitcoin wallet?

This, again, depends on the wallet. In fact, many web wallets (cryptocurrency exchanges) don't give you any control over the network fee whatsoever. Instead, they have a pre-determined fee (which is almost always set higher than the actual fees they will pay). In other words, they profit when their customers withdraw bitcoin. This is a common revenue-generation strategy for cryptocurrency exchanges.

With the non-custodial wallet, there are three convenient fee settings, as well as the option to set custom fees. The default BTC network fee ("Normal") for sending bitcoin is automatically set by the Wallet to have your transaction most likely confirmed within the next two blocks (so less than 20 minutes). If you change it to "Priority," you'll pay a higher satoshi-per-byte rate and likely have your transaction confirmed in the next block (so less than 10 minutes). Changing it to "Economy" will save you some money, but still result in your transaction getting confirmed within the next several blocks, so less than 60 minutes. For advanced users, you also have the option of setting a custom fee. You'll want to use a tool like Bitcoinfees to ensure you're choosing an appropriate fee given the current state of network congestion.

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