Sending and Receiving Bitcoin
If you have purchased things online with Paypal or done online banking before, using bitcoin for purchase of goods and services on the internet is not very different. Instead of logging in to your Paypal or bank website, with bitcoin, you log into your personal wallet on your smartphone and authorise payments from there. Below is a simple guide on how to use bitcoin.
In essence, this puts the bank in your pocket. You effectively become custodian of your own funds, and decide when and whom to send it to or receive from. Anyone can now transact money at his or her discretion, under full 24/7 control, without going through an intermediary. More importantly, this also means you’re not at the mercy of the operating hours of the bank, and certainly not subject to the high transaction fees charged by these institutions.
SENDING AND RECEIVING METHODS
There are two main ways bitcoin may be sent and received:
Via a Wallet Address
Every wallet that stores bitcoin is identified by an address, and multiple addresses can be created for different types or sources of funds. Think of wallet addresses like email addresses – you may create as many as you like, for a variety of purposes – work, home etc. However, unlike email addresses which usually has your name and a company or organisation name behind it, wallet addresses make little sense. Or no sense at all. Each address is made up of a string of alphanumerics which consists of up to 34 characters.
Bitcoin payments are usually initiated by the Receiver (the Payee). To receive bitcoin, generate a new receive address within the wallet by clicking on Request in your wallet, and then copy, paste and send it by instant messaging or email to the Sender (the Payor). You may perform the following steps on your smartphone, tablet or computer.
|1. Click on REQUEST to create a bitcoin receive address in the Blockchain bitcoin wallet.
2. Under the Receive To: field, select the wallet you would like the funds to be transferred to. You may leave it at the default My Bitcoin Wallet if you’ve not created other wallet addresses.
3. Click on COPY to copy the address. You may omit the other fields.
|4. Paste the copied bitcoin address and send it to the Sender via email, SMS or instant messaging such as WhatsApp (shown here).
5. The Sender will then paste it into his bitcoin wallet so that he may transfer the agreed bitcoin amount to you. This is described below.
To send bitcoin, first obtain the address of the Receiver as described above. Copy and paste the Receiver’s wallet address onto your Send To field, and hit the Send button. Depending on how your wallet is set up, you may need to key in your secondary password to complete the transaction. The transaction may require between 3 to 6 confirmations from miners, but will eventually be completed once everything checks out right.
Via a QR Code Scan
A QR Code may also be generated for every new bitcoin receive address that you create. As the Receiver, you may generate and show this QR code on your smartphone, tablet or computer screen directly to the Sender, which he can then conveniently scan with his smartphone wallet, which we will demonstrate as follows. The following uses the Blockchain bitcoin wallet on the browser to generate a bitcoin receive address and QR code.
|1. From the REQUEST page in Step 1 above, click on View QR Code located above the COPY button.
2. A QR code is generated for the bitcoin receive address which you can show directly to the Sender to be scanned so that bitcoin can be transferred.
|3. The Sender then launches the Blockchain bitcoin wallet on his smartphone and scans the QR code on the screen of the computer (as shown here), tablet or another smartphone.|
|4. The app detects the QR code and shows the corresponding bitcoin receive address.
5. The Sender then keys in the amount of bitcoin to be sent and clicks on CONTINUE. A secondary password may or may not be required depending on the preference setting set by the Sender.
QR codes allow addresses to be inserted quickly, without the cumbersome copy and paste procedure. A QR code can also be printed on an invoice paper by merchants who accept bitcoin payments, so that you may quickly scan it with your smartphone and complete the transaction.
To get started, download and register a free Blockchain wallet app on your smartphone if you’ve not done so. The Blockchain bitcoin wallet app is available for iOS and Android devices in the respective App Store and Play Store. You may refer to Setting Up a Blockchain Wallet. Once you have set up your bitcoin wallet, you may practise sending and receiving bitcoin with your spouse or a close friend. Start off with a small amount of a dollar or two to build confidence and to develop a sense of familiarity with the bitcoin wallet app!