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Section 5 · Fundamentals

Using Bitcoin

Beginner

⏱ Estimated reading time: 14 minutes

How to send and receive Bitcoin. Understanding transaction fees. Confirmation times. Using Bitcoin for purchases. Payment processors.

Topics

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Sending and Receiving Bitcoin: How It Actually Works

Bitcoin transactions are remarkably simple to execute — but understanding what's happening under the hood gives you confidence and prevents costly errors.

Receiving Bitcoin

To receive bitcoin, you share your Bitcoin address — a string of letters and numbers (or a QR code) that acts like an email address for money. Anyone can send to it; only your private key can spend from it.

  • Generate a new address for each transaction (good privacy practice)
  • Your wallet manages all your addresses automatically
  • There's no limit to how many addresses you can have

Sending Bitcoin

  1. Open your wallet and choose "Send"
  2. Enter or scan the recipient's address
  3. Enter the amount (in BTC or your local currency)
  4. Choose a fee (higher fee = faster confirmation)
  5. Double-check the address and amount
  6. Confirm and broadcast

What Happens Next?

Your transaction is broadcast to the Bitcoin network. Miners pick it up, include it in a block, and after ~10 minutes it receives its first confirmation. After 6 confirmations (about 1 hour), it is considered final and irreversible.

📡 Broadcast Wallet to Nodes ⏳ Mempool Waiting Area ⛏️ Block 1 Confirmation 🔒 Secured +6 Confirms

The journey of a transaction: from broadcast to mempool waiting area, to inclusion in a block, to final settlement.

"Bitcoin transactions are like dropping a letter in a one-way slot — once sent, you cannot take it back."

Want to go deeper?

This content is written and approved by Marius, AI-assisted using Claude (Anthropic), with references curated from: Jameson Lopp (lopp.net, PD) · Bitcoin Design Guide (bitcoin.design, Apache 2.0) · bitcoin.org (MIT).

Bitcoin Transaction Fees: What They Are and How to Manage Them

Bitcoin fees aren't a mystery — once you understand how they work, you can save money and make smarter decisions about when and how to transact.

Why Do Fees Exist?

Bitcoin miners are paid in two ways: the block reward (newly created bitcoin) and transaction fees. Fees incentivise miners to include your transaction in the next block. As the block reward halves over time, fees become increasingly important to Bitcoin's security model.

How Fees Are Calculated

Fees are based on transaction size in bytes — not the amount of bitcoin sent. A simple 1-input, 1-output transaction costs less than a complex multi-input transaction. Fee rate is expressed as satoshis per virtual byte (sat/vB).

Fee Levels

  • High priority (fast): Confirmed in the next 1–3 blocks (~10–30 min)
  • Medium priority: Confirmed within 1–6 blocks (~10–60 min)
  • Low priority (slow): May take hours or days if the mempool is congested

Tips to Manage Fees

  • Use a fee estimator (mempool.space) to see current network conditions
  • Transact when the mempool is quiet (weekends, off-peak hours)
  • Use wallets that support Replace-By-Fee (RBF) — lets you bump a stuck transaction
  • Use SegWit or Taproot addresses — they reduce transaction size and therefore fees
"Fees are Bitcoin's market mechanism for prioritising block space. Understanding them puts you in control."

Want to go deeper?

This content is written and approved by Marius, AI-assisted using Claude (Anthropic), with references curated from: Jameson Lopp (lopp.net, PD) · Bitcoin Design Guide (bitcoin.design, Apache 2.0) · bitcoin.org (MIT).

Bitcoin Confirmations: When Is a Transaction Final?

You've just sent bitcoin — now what? Understanding confirmations tells you exactly when your transaction is secure and irreversible.

What Is a Confirmation?

When a miner adds your transaction to a block, it receives 1 confirmation. Every subsequent block added on top of it adds another confirmation. More confirmations = more security.

How Many Confirmations Do You Need?

  • 0 confirmations (unconfirmed): Transaction is in the mempool. Can theoretically be reversed. Don't accept for anything valuable.
  • 1 confirmation: Included in a block. Very unlikely to be reversed. Fine for small, low-risk transactions.
  • 3 confirmations: Standard for most retail transactions. ~30 minutes.
  • 6 confirmations: Industry standard for large transactions. ~1 hour. Considered final.
  • More for very large amounts: Some exchanges wait for 100+ confirmations before crediting very large deposits.

Why Does This Matter?

Reversing a confirmed transaction requires controlling more than 50% of the network's hash rate — a 51% attack. This is economically prohibitive on the Bitcoin network, which is the most secure blockchain in existence.

"6 confirmations isn't just a convention — it's a mathematical statement about economic finality."

Checking Your Transaction

Use a block explorer like mempool.space or blockstream.info to track your transaction status in real time.

Want to go deeper?

This content is written and approved by Marius, AI-assisted using Claude (Anthropic), with references curated from: Jameson Lopp (lopp.net, PD) · Bitcoin Design Guide (bitcoin.design, Apache 2.0) · bitcoin.org (MIT).

Spending Bitcoin: Where and How You Can Use It

Bitcoin started as "digital cash" — and while it's increasingly used as a store of value, you can absolutely spend it today. Here's where and how.

Where Can You Spend Bitcoin?

  • Online merchants — thousands of businesses accept bitcoin directly, including major platforms like Newegg, Namecheap, and many others
  • Bitcoin debit cards — load a card that converts bitcoin to local currency at point of sale (e.g., Bitrefill, Fold)
  • Gift cards — buy gift cards for Amazon, Starbucks, etc. with bitcoin via Bitrefill or The Bitcoin Company
  • Travel — book flights and hotels with bitcoin on platforms like Travala
  • Lightning Network — instant, near-zero-fee payments at any Lightning-enabled merchant
  • Peer-to-peer — pay friends, freelancers, or international contractors directly

Discover businesses that accept Bitcoin in our Orange Pages directory.

The Lightning Network: Bitcoin for Everyday Payments

The Lightning Network is a second-layer protocol built on top of Bitcoin that enables instant payments with fees of fractions of a cent. It's designed for everyday small purchases where waiting 10 minutes is impractical.

Tax Consideration

In most countries, spending bitcoin is a taxable event — you may owe capital gains tax on the difference between what you paid for the bitcoin and its value when you spent it. Keep records.

"Every time you spend bitcoin, you're demonstrating that value can move across the world without permission from any intermediary."

Want to go deeper?

This content is written and approved by Marius, AI-assisted using Claude (Anthropic), with references curated from: Jameson Lopp (lopp.net, PD) · Bitcoin Design Guide (bitcoin.design, Apache 2.0) · bitcoin.org (MIT).

QR Codes and Bitcoin Addresses: Making Transactions Easy and Safe

Bitcoin addresses look intimidating — a long string of random letters and numbers. QR codes solve this elegantly, and understanding them makes your Bitcoin experience faster and safer.

What Is a Bitcoin QR Code?

A QR code is simply a visual encoding of your Bitcoin address (and optionally: an amount and a label). Scanning it with your wallet app automatically fills in the recipient address — eliminating the risk of typos.

How to Use QR Codes

  • To receive: Open your wallet, tap "Receive", show the QR code. The sender scans it.
  • To send: Open your wallet, tap "Send", tap the camera icon, and scan the recipient's QR code.

Bitcoin URI Format

QR codes can encode more than just an address. A full Bitcoin URI looks like:

Key Takeaways

  • Bitcoin transactions are irreversible — always double-check addresses before sending. There is no undo.
  • Fees are based on transaction size in bytes, not the amount sent. Use mempool.space to check current fee rates before transacting.
  • 6 confirmations (~1 hour) is the industry standard for considering a large transaction final.
  • Bitcoin can be spent today at thousands of merchants directly, or via Lightning Network for instant, near-zero-fee everyday payments.
  • QR codes make sending and receiving fast and eliminate typo errors — but always visually verify the address characters.

Frequently Asked Questions

How do I send Bitcoin to someone?

To send Bitcoin, you need the recipient's Bitcoin address (a string of letters and numbers). Open your wallet, enter the address and amount, review the transaction fee, and confirm. Always double-check the address before sending — Bitcoin transactions cannot be reversed.

How long does a Bitcoin transaction take?

A Bitcoin transaction typically gets its first confirmation in about 10 minutes (one block). For small amounts, one confirmation is usually enough. For larger amounts, waiting for 3–6 confirmations (30–60 minutes) is recommended for extra security.

What are Bitcoin transaction fees?

Transaction fees are paid to miners for processing your transaction. Fees vary based on network congestion — they can range from a few cents to several dollars during busy periods. The Lightning Network offers near-instant transactions with fees under one cent.

Continue Learning

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Storing Bitcoin Safely

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Bitcoin and the Law

See also: Bitcoin Glossary · Swap Tool · Lightning Network

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