If you want to store your cryptocurrency securely, you’ll often need to be able to send your cryptocurrency from the place of purchase (such as an exchange or broker) to a public address where you control the private keys.
Recapping Public Addresses
A public address is a string of letters and numbers. In the same way you give someone your email address so they can send you an email, you can give someone your public address so they can send you some cryptocurrency.
Public addresses are located on a blockchain. Different blockchains have different address types, for example an on the Bitcoin blockchain network, a public address may look like this: 3LRa21dSNRx1Tz4eSgqME5CuLHix1Yxyq7, whereas on the Ethereum blockchain network, an address may look like this: 0x64DC5aCbA24d6F6EFF6781Ac4FECec79c091Ad02.
How Sending Works
- Sending cryptocurrency is actually similar to sending an email. Like when you send an email, you enter an email address you want to send the email to (e.g. [email protected]) when sending cryptocurrency, you send it to a public address (e.g. 0x64DC5aCbA24d6F6EFF6781Ac4FECec79c091Ad02)
- Similarly if you want to receive cryptocurrency, you’ll need to provide the sender with your public address.
- Users interface with wallets to access their private keys and control their cryptocurrency, allowing them to send it from one address to another.
- Senders incur a small fee for sending cryptocurrency. Fee levels fluctuate depending on how busy the blockchain network is (this will be covered in more detail later).
- Transactions are processed and confirmed on the blockchain, ensuring the funds leave one public address and arrive in another. The processing time for transactions varies between blockchains and often depends on how busy the network is and how much the sender is willing to pay for a fee.
- James is sending 1 ETH to his friend, Alex.
- He asks Alex for this public address so he knows exactly where to send the cryptocurrency.
- James opens his Ethereum wallet, clicks ‘send’ and pastes Alex’s public address under the ‘recipient address’ field (similar to how he might compose an email).
- James takes great care to ensure that the public address that he has entered matches the public address provided to him by Alex before entering the amount he wants to send.
- James is presented with an estimation cost or fee associated with sending the transaction.
- James reviews and double checks the destination address and amount before clicking ‘send’ to initiate the transaction.
- Once initiated, the transaction is added to the ‘waiting room’ (or mempool) for pending transactions on the Ethereum blockchain.
- Depending on factors including the level of network activity, it will take roughly 15 seconds to a few minutes for the blockchain to confirm the transaction and for Alex’s wallet to receive the 1 ETH from James.
Ways to Send Cryptocurrency
Manual addresses: This is the most common way you’ll send or receive cryptocurrency. That is, you manually enter the public address in your wallet when you want to send or receive cryptocurrency. To save time and ensure your public address is correct, there will typically be a copy feature in the wallet. Regardless of how the public address is manually entered, it is imperative that you double check the public address entered is the desired destination address.
QR code: Some wallets support using an QR code to send and receive cryptocurrency. They’re a simple, fast and secure way to share an address when sending or receiving cryptocurrency. They’re an effective way to transfer cryptocurrency when buying a good or service in a physical setting. Because you can’t copy and paste, your only other option is to type the address character by character; a time-consuming and potentially error-prone process.
Considerations When You’re Sending or Receiving Cryptocurrency
- You can’t send addresses to another type of blockchain. For example, you can’t send BTC to an Ethereum address.
- Sending cryptocurrency is irreversible.
- When sending for the first time, you may want to practice by sending an insignificant amount before sending a significant amount.