On my balance, I now have 0.01062797 BTC and you probably have something different. What does that mean, and why so many decimals?
Introducing the Satoshi! A satoshi is a unit of measure to compare different cryptocurrencies. The last decimal of 1 unit of bitcoin is 1 satoshi. This last decimal always is the 8th one, but be careful with this, because some exchanges allow some cryptocurrency to be traded below 1 sat, and then add the 9th decimal to their price.
Back to our satoshi, I now own 1,062,797 satoshis, and it is approximately worth 100€. When compared to Bitcoin, the other cryptocurrencies have a value counted in “shares of bitcoins”. For example, 1 XRP is equivalent to 0.00002920 BTC. Its value is then 2,920 satoshis.
Process To Transfer Cryptocurrencies:
Now we want to know how to send or receive funds with our cryptocurrencies. This process can be used in several scenarios:
- You have to send 100$ to a friend living across the border, and paying with cryptocurrencies is cheaper.
- You want to start trading on an exchange, and so you have to send your funds to an exchange.
- You want to receive some bitcoins.
We now have to introduce you to the concept of an address.
When you want to transfer your money to a friend, through the bank, you have to enter his bank details. Contrarily, when you want to receive money from a friend, you will have to give him your bank details.
With the Blockchain, transferring coins is processed through the same concept. If you want to send 1 Bitcoin to a friend, he has to give you his Bitcoin Address.
Otherwise, if you want to receive Bitcoins, you will have to provide a Bitcoin Address.
Be careful. Addresses are only usable on the Blockchain they were generated from. An address generated on Bitcoin Blockchain cannot receive ETH (Ether) from the Ethereum blockchain.
Most of the time, addresses can be differentiated from each other. An ETH address will start with 0x. A Bitcoin Address will most likely begin with a number.
To transfer funds from Coinbase, you have to click on Portfolio. It will display your overall funds and recent transactions.
When selecting Bitcoin, you will have the choice to Send or Receive.
When clicking on Receive, Coinbase will provide you a captcha and a Wallet address. This address is public, but only you can access the funds through Coinbase. We will learn later how all of this works in terms of security.
Now, let us say that you want to send your funds to an exchange, and the exchange gave you a BTC Address. This address is personal, so anything being sent to the address provided will be yours.
I now want to trade on Binance, so I have to move my Bitcoins to the exchange first.
I will now proceed to a transfer of my funds to the personal Bitcoin address that Binance provided me.
After passing all the security layers on Coinbase, you can send your funds. Now your transfer is pending.
This moment is perfect for explaining to you how a transaction works. So we know that a transaction happens between at least 2 addresses. This transaction is part of a block on the Blockchain and is identified by a “hash”.
Since the Blockchain is transparent, we can now monitor our transaction on the explorer. The explorer is an online resource allowing us to navigate on the Blockchain. You can visit the Bitcoin Explorer on https://www.blockchain.com/explorer.
This explorer allows you to search for things like addresses, transactions, and blocks. Here you just have to enter your address on the search bar. Once done, you will find all the transactions that occurred on this address. Click on the most recent one.
You can now analyze the details of this transaction. It is quite frequent to see multiple receiving addresses when using services like Coinbase. They might gather some transactions into one only to maximize their speed. Do not worry. This process will not affect the security of the network.
After a few times, the transaction will then be confirmed by the network, and you will see the funds being appearing on the balance of the receiver. Please remember that a transaction on the Blockchain cannot be undone, double-check every time you are making a transfer to make sure the receiving address is correct. This kind of mistake can quickly happen.