How Do Bitcoin Transactions Work?

How Do Bitcoin Transactions Work?

When a person wants to make a transaction, they broadcast that they want some of their Bitcoins moved to another person or companies wallet and within a few seconds, everyone running the Bitcoin client receives this message. They may send the Bitcoin from their home computer or an application running on their cell phone for an in-person purchase. When Bitcoin just started, users would have to enter the exact address of the recipient and the exact amount of Bitcoin to pay a specific dollar amount. Fortunately, things have gotten much easier. Here are a few of the ways you can transfer funds.

Manually using the Bitcoin client:

Image Source: http://resources.infosecinstitute.com/wp-content/uploads/062613_1128_Bitcoin3.pngThe Bitcoin software that runs on Bitcoin user’s computers has a screen that you can copy and paste the address of the recipient and type in the amount of Bitcoin you would like to send. It is a little cumbersome for day to day use, but it is a tried and true way to use your Bitcoin.

 

 

 

Using Your Cellphone:

Image Source: http://25.media.tumblr.com/e19938fe54c42b31a2b51b3907bae4a2/tumblr_n0j5wuIVzm1sh76xyo1_1280.pngFor in person purchases, you will want to use a cell phone app like Bitcoin Wallet. This allows you to use your phones camera to scan a QR code that contains the amount and the address provided by the merchant. These apps do all of the hard work for the customer so they just have to scan the automated QR code approve the transaction. It takes only seconds and is easier than cash or credit.

 

 

 

 

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