How do Bitcoin transactions work?

Bitcoin transactions enable you to send currency from one online wallet to another. It starts with the payee and the payer exchanging a private key, which is a randomly generated number.

The transaction then goes through a number of confirmations, from 0 to 5. The most common number of confirmations is 1. More confirmations are recommended when you are sending a larger number of Bitcoins. Each confirmation takes approximately 10 minutes to complete in the blockchain/Bitcoin network. Once it’s completed, a transaction can be viewed by anyone in the blockchain, though no sensitive information is revealed.

Where do I get Bitcoins?

Bitcoins can be purchased at the following places:

Bitcoin exchanges

Bitcoin exchanges are online marketplaces where you can purchase Bitcoins. These exchanges can vary in terms of security, reliability, reputation and processing fees, and they often require proof of identity. You can also store your Bitcoins through an exchange.

Over the counter

You can also buy Bitcoins directly from another person. While this method sacrifices the anonymity of a normal Bitcoin transaction, it is still a very popular method of obtaining Bitcoins. There are many websites out there that connect Bitcoin sellers with buyers.

Bitcoin ATMs

Bitcoin ATMs look and act like regular ATMs but instead of receiving cash, you get a receipt with a designated code. Scanning this code adds Bitcoins to your wallet.

Why use Bitcoin?

Bitcoin is the most popular and widely used digital currency for a few reasons. Unlike regular money transfers, Bitcoin transactions never take more than a few hours, no matter how large the sum is, or where the user is located. Fees are also considerably lower, never being more than just a few cents. Chargebacks are not possible with Bitcoin, making fraud almost impossible. No bank, government or person controls Bitcoins. This means that, unlike fiat currency transactions, Bitcoin transactions remain anonymous and cannot be seized.

What is Bitcoin?

Bitcoin is a digital currency (also known as a cryptocurrency) that was created in 2009 by an unknown person or a group of people using the alias Satoshi Nakamoto. It’s a type of currency that is completely virtual, meaning it can only be created, stored and used online.

The number of bitcoins in circulation is capped at 21 million. However, the smallest possible denomination is 0.00000001 of 1 bitcoin, so there are plenty to go around.

Bitcoin is decentralized and runs on the blockchain, which means there’s no middle involved in Bitcoin transactions. The transaction confirmation time is dependent on the transaction fee because cryptocurrency miners verify transactions with higher fees first. Therefore, a transaction with a smaller fee can take a few hours or more to be confirmed.

To speed up the confirmation of your transaction, we advise you to use what the average recommended transaction fee is at that time.