How to Send Bitcoin to Another Wallet | SoFi

Sending Bitcoin from one wallet to another is fairly straightforward, and generally requires two basic things: a cryptocurrency wallet with some coins, and a public key address to complete the transaction. Because Bitcoin is a peer-to-peer network, only the two entities executing the transaction need to be involved.

But depending on the type of wallet used, the exact process of a Bitcoin transfer could be slightly different. The process is generally the same for different types of cryptocurrency, too.

How Does Sending Bitcoin Work on the Blockchain?

In a broad sense, sending Bitcoin from one wallet to another involves a digital transaction — an exchange of addresses, and then a transfer of ownership data which is then recorded on the Bitcoin blockchain.

As such, the basics of how to transfer Bitcoin involves two crypto wallets, a Bitcoin address, and usually a transaction fee.

Practically speaking, it’s often as simple as sending someone money using a p2p platform, such as Venmo or PayPal.

Is Sending Bitcoin Free?

The short answer: No. Sending Bitcoin is not free. Since miners or participants on the Bitcoin blockchain need to process a transaction and record it on the blockchain, there is some work to be done — and usually, those executing transactions need to pay the miners to do the work.

This usually takes the form of a network fee, which is paid out to the entities mining and validating data on the blockchain.

How Bitcoin Fees Are Determined

Crypto fees, including those for sending Bitcoin, operate on a supply and demand model. Basically, a blockchain only has so many resources — such as validators and miners — that can process data and record it to the network. So, when many entities are competing for those resources, it can cause fees to increase. Likewise, when demand is low, fees may be lower, too.

If you want your transaction to go through faster, paying higher fees may help make that happen. But the going rate for Bitcoin fees fluctuates with the supply and demand on the network.

There are ways to try and minimize crypto trading fees, too.

Setting the BTC Network Fee

As mentioned, you can adjust the fee you pay in an effort to speed up your transaction speed. The nuts and bolts of doing so will depend on the specific crypto wallet you’re using, but usually, it involves setting a customized network fee when setting up a transaction from your crypto wallet. If you want to pay a lower fee, your transaction will probably take longer — but the higher the fee you pay, the faster your transaction is likely to execute.

Again, it’s all about supply and demand, and validators and miners on the blockchain respond to incentives: aka money.

How to Send Bitcoin in 3 Simple Steps

First and foremost, if you haven’t gotten around to setting up a crypto wallet, you’ll need to do that before anything else. But after that, with almost any crypto wallet, the process of conducting a bitcoin transfer involves the same general steps, which should be followed with care:

1. Enter the Address

You need to point your transaction to the right place, which means entering the address of the wallet you want to send Bitcoin to. Users should always double-check the address they are sending to. Some hardware wallets will explicitly remind users to do this. When possible, using a QR code address might be the preferable method, just to be absolutely certain.

2. Enter the Amount

Next, enter the amount or quantity of Bitcoin you wish to send. When entering the amount of Bitcoin to send, some wallets might allow users to dictate in terms of fiat (like U.S. dollars). It’s important to notice which currency is being displayed to avoid any errors.

If a user’s wallet supports multiple cryptocurrencies, it’s also important to select the correct coin. Sending Bitcoin (BTC) to a bitcoin cash (BCH) address, for example, could result in a permanent loss of funds. Sending any cryptocurrency to an address for another cryptocurrency will generally send them into a digital oblivion where they can’t be retrieved by any means — similar to sending cash to a stranger’s bank account, with no avenue for recourse.

For larger transactions, it may be a good idea to send a small amount of Bitcoin as a test, to make sure the address is correct.

3. Broadcast by Sending

Broadcast the transaction by hitting “send.” When sending from some desktop wallets, users may be required to select the network fee before clicking send, as discussed. And again, higher-fee transactions are usually given higher priority by Bitcoin miners and will reach their destination in a shorter amount of time.

When using exchange-hosted wallets and most hardware wallets, the network fee amount will be automatically chosen for the user.

How Do I Receive Bitcoin?

Receiving Bitcoin only requires that a user has a wallet and a public address for that wallet. To receive funds, simply provide the public address to the person who wants to send you Bitcoin.

There are really two steps needed to receive Bitcoin:

1.    Open your wallet and select “receive” or “generate new address.” Your wallet should offer one of these options, or something similar.

2.    Share the address with the Bitcoin sender. The address can come in the form of a string of numbers and letters or as a QR code. The QR code can be sent as a picture or scanned directly by a smartphone.

There are also services that allow merchants to accept bitcoin as payment for goods and services. Most often, the service will convert the coins to local currency immediately and deliver the funds to the merchant in exchange for a small fee.

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How Do I Transfer Bitcoin to Another Wallet?

Transferring Bitcoin to another wallet works much like sending Bitcoin to another user. Simply generate a public key address for the receiving wallet and send coins to it from the sending wallet.

In fact, the process is more or less exactly the same, as transferring or sending cryptocurrencies to a different crypto wallet are not different in any practical way. As such, the way to do so mirrors much of what we’ve already covered, whether you’re transferring Bitcoin to another person or entity’s wallet, or between two wallets that you own:

You’ll need a Bitcoin address to send or transact to. Having that is essential, otherwise, it’s like throwing a letter in the mail without writing an address on the envelope.

After that, it’s a matter of using your wallet’s transfer interface to select the amount of Bitcoin to transfer, and to determine the network fee you are willing to pay. If you’re transferring Bitcoin between two wallets that you own, you may not be in a huge rush to execute the transaction. (This may be an example of a time when you’re okay with paying a low network fee, even though the transaction might take longer.)

With all of that squared away, it’s just a matter of hitting “send” to execute the transaction. Again, the specifics of these steps will depend entirely on the crypto wallet you’re using to send your Bitcoin.

And one other thing to be aware of: The recipient (even if it’s you) doesn’t need to pay any network fees to accept incoming Bitcoin transfers. Those fees are paid by the entity initiating the transfer. So, if you’re transferring Bitcoin between two wallets that you own, you won’t get dinged with multiple fees — you’ll only need to pay once.

Can You Send Money Using Bitcoin?

In a Bitcoin transaction, the coin balance represents monetary value. So, in a way, yes, you can send money using Bitcoin. But using a web, desktop, or hardware wallet to send fiat currency (like U.S. dollars, euros, or yen) isn’t something commonly done — although some multi-currency wallets might have this feature.

Some cryptocurrency exchanges also enable the trading of fiat currencies, so it might theoretically be possible to send fiat currency to another user on that same exchange. The Bitcoin network alone, however, can’t currently be used to send anything other than Bitcoin.

Can I Send Bitcoin to Someone Without a Wallet?

The short answer is no. Using traditional wallets, there’s no way to send Bitcoin to someone without a wallet.

As discussed, you wouldn’t try to mail a letter to someone without writing an address on the envelope — the mail carrier wouldn’t know where to take it. By the same token, you can’t send Bitcoin to someone who doesn’t have a crypto wallet, as they’d have no way of receiving the Bitcoin, and you’d have no way of actually sending BTC without a digital address.

There are, however, some workarounds.

For example, there are some available services that let people send Bitcoin to someone else using alternative methods, like an email address. In these cases, the coins are held in a new wallet until they can be claimed by the recipient. So, technically speaking, the recipient would still need to get a crypto wallet in order to retrieve their Bitcoin — at least at some point.

Of course, it’s also possible to possess Bitcoin through another round-about way: via an investment vehicle like a Bitcoin-based exchange-traded fund (ETF). ETFs are like baskets of investments, and can contain a mixture of stocks, bonds, and other assets. Crypto ETFs can and do contain mixtures of crypto assets, or crypto-backed assets, giving investors exposure to the market.

So, while it’s not exactly the same, there is a way to own or have some exposure to the Bitcoin market without a wallet.

The Takeaway

Sending Bitcoin only requires a wallet with some funds and the address (public key) or QR code of the wallet you want to send Bitcoin to. The exact details may differ depending on the wallet used to send the transaction, but the sender doesn’t need to be concerned with what type of wallet the receiver is using.

You should also take things like fees into consideration when sending Bitcoin, but keep in mind that only the sender is on the hook for any applicable costs. All told, sending or transferring Bitcoin to a new wallet is a fairly simple process, so long as you’re careful to focus on the details!

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FAQ

How can you send Bitcoin to someone’s Bitcoin address?

First you’d need the other crypto wallet’s address, so that you know where to transfer the Bitcoin or other assets. Next, you select the amount, double check the digital address (otherwise your funds could be lost), and click send.

Can you send Bitcoins for free?

You can’t really send Bitcoin for free, as someone transferring or sending Bitcoin will need to pay a network fee. That fee pays the miners and validators on the blockchain to execute and process the transaction, and since doing so is a resource-intensive activity, they aren’t willing to do it for nothing.

Photo credit: iStock/happyphoton

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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
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SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
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