@ -428,23 +428,25 @@ In most wallets, there is no association between a Bitcoin address and any exter
==== Receiving bitcoin
Alice uses the _Receive_ button, which displays a QR code along with a Bitcoin address, shown in <<bluewallet_receive>>.
Alice uses the _Receive_ button, which displays a QR code along with a Bitcoin address, shown in <<wallet_receive>>.
[[bluewallet_receive]]
.Alice uses the Receive screen on her Bluewallet mobile Bitcoin wallet, and displays her address to Bob in a QR code format
image::images/mbc2_0101.png["BluewalletWelcome"]
[[wallet_receive]]
.Alice uses the Receive screen on her mobile Bitcoin wallet, and displays her address in a QR code format
image::images/receive.png["Wallet receive screen with QR code displayed"]
The QR code is the square with a pattern of black and white dots, serving as a form of barcode that contains the same information in a format that can be scanned by Joe's smartphone camera. Next to the wallet's QR code is the Bitcoin address it encodes, and Alice may choose to manually send her address to Joe by copying it onto her clipboard with a tap.
The QR code is the square with a pattern of black and white dots, serving as a form of barcode that contains the same information in a format that can be scanned by Joe's smartphone camera. Near the wallet's QR code is the Bitcoin address it encodes, and Alice may choose to manually send her address to Joe by copying it onto her clipboard with a tap.
[WARNING]
====
Do not send money to the addresses in this book, it will be lost. Despite this warning people try to scan and send money, so the QR codes and addresses are blurred in the wallet screenshots.
Any funds sent to the addresses in this book will be lost. If you want
to test sending bitcoins, please consider donating it to a
bitcoin-accepting charity.
====
[[getting_first_bitcoin]]
==== Getting Your First Bitcoin
((("getting started", "acquiring bitcoin")))The first and often most difficult task for new users is to acquire some bitcoin. Unlike other foreign currencies, you cannot yet buy bitcoin at a bank or foreign exchange kiosk.
((("getting started", "acquiring bitcoin")))The first task for new users is to acquire some bitcoin.
Bitcoin transactions are irreversible. Most electronic payment networks such as credit cards, debit cards, PayPal, and bank account transfers are reversible. For someone selling bitcoin, this difference introduces a very high risk that the buyer will reverse the electronic payment after they have received bitcoin, in effect defrauding the seller. To mitigate this risk, companies accepting traditional electronic payments in return for bitcoin usually require buyers to undergo identity verification and credit-worthiness checks, which may take several days or weeks. As a new user, this means you cannot buy bitcoin instantly with a credit card. With a bit of patience and creative thinking, however, you won't need to.
@ -471,8 +473,9 @@ touches traditional systems, such as currency exchanges, national and
international regulations often apply. In order to exchange bitcoin for
your national currency, you will often be required to provide proof of
identity and banking information. Users should be aware that once a
Bitcoin address is attached to an identity, all associated bitcoin
transactions are also easy to identify and track. This is one reason
Bitcoin address is attached to an identity, other associated bitcoin
transactions may also become easy to identify and track--including
transactions made earlier. This is one reason
many users choose to maintain dedicated exchange accounts unlinked to
example")))((("spending bitcoin", see="also transactions")))Alice has
decided to exchange $100 US dollars for bitcoin. She gives Joe $100 in
cash, opens her mobile wallet application, and selects Receive. This
decided to buy 0.001 bitcoin. After she and Joe check the exchange rate,
she gives Joe an appropriate amount of cash, opens her mobile wallet
application, and selects Receive. This
displays a QR code with Alice's first Bitcoin address.
Joe then selects Send on his smartphone wallet and is presented with a screen containing two inputs:
Joe then selects Send on his smartphone wallet and opens the QR code
scanner. This allows Joe to scan the barcode with his smartphone camera
so that he doesn't have to type in Alice's Bitcoin address, which is
quite long and difficult to type.
* A destination bitcoin address
* The amount to send, in Bitcoin (BTC) or his local currency (USD)
[[bluewallet-mobile-send]]
[[wallet-send]]
[role="smallereighty"]
.Airbitz mobile bitcoin wallet send screen
image::images/mbc2_0102.png["airbitz mobile send screen"]
In the input field for the Bitcoin address, there is a small icon that looks like a QR code. This allows Joe to scan the barcode with his smartphone camera so that he doesn't have to type in Alice's Bitcoin address, which is quite long and difficult to type. Joe taps the QR code icon and activates the smartphone camera, scanning the QR code displayed on Alice's smartphone.
Joe now has Alice's Bitcoin address set as the recipient. Joe enters the amount as $10 US dollars and his wallet converts it by accessing the most recent exchange rate from an online service. The exchange rate at the time is $100 US dollars per bitcoin, so $10 US dollars is worth 0.10 bitcoin (BTC), or 100 millibitcoin (mBTC) as shown in the screenshot from Joe's wallet (see <<bluewallet-mobile-send>>).
[TIP]
====
The price of bitcoin has changed a lot over time, and an incredible amount since the first edition of this book was written. As of October 2021, a person would need approximately $67,000 USD to purchase one whole bitcoin. When the first edition of this book was written, a bitcoin was worth less than $500 USD.
====
He also selects a transaction fee for his transaction. The higher the transaction fee, the faster his transaction will be confirmed (included in a block by a miner). He selects the minimum transaction fee possible at that time (1 satoshi/vbyte).
.Bitcoin wallet send screen
image::images/mbc2_0102.png["Wallet send screen"]
Joe now has Alice's Bitcoin address set as the recipient. Joe enters the
amount as 0.001 bitcoin (BTC), see <<wallet-send>>. Some wallets may
show the amount in a different denomination: 0.001 BTC is 1 millibitcoin
(mBTC) or 100,000 satoshis (sats).
Some wallets may also suggest Joe enter a label for this transaction; if
so, Joe enters "Alice". Weeks or months from now, this will help Joe
remember why he sent these 0.001 bitcoins. Some wallets may also prompt
Joe about fees. Depending on the wallet and how the transaction is
being sent, the wallet may ask Joe to either enter a transaction feerate or
prompt him with a suggested feerate. The higher the transaction feerate, the
faster the transaction will be confirmed (see <<confirmations>>).
Joe then carefully checks to make sure he has entered the correct
amount, because he is about to transmit money and mistakes are
amount, because he is about to transmit money and mistakes will soon become
irreversible. After double-checking the address and amount, he presses
Send to transmit the transaction. Joe's mobile Bitcoin wallet constructs
a transaction that assigns 0.10 BTC to the address provided by Alice,
a transaction that assigns 0.01 BTC to the address provided by Alice,
sourcing the funds from Joe's wallet and signing the transaction with
Joe's private keys. This tells the Bitcoin network that Joe has
authorized a transfer of value to Alice's new address. As the
transaction is transmitted via the peer-to-peer protocol, it quickly
propagates across the Bitcoin network. In less than a second, most of
propagates across the Bitcoin network. After just a few seconds, most of
the well-connected nodes in the network receive the transaction and see
Alice's address for the first time.
Meanwhile, Alice's wallet is constantly "listening" to published
Meanwhile, Alice's wallet is constantly "listening" for new
transactions on the Bitcoin network, looking for any that match the
addresses it contains. A few seconds after Joe's wallet transmits the
transaction, Alice's wallet will indicate that it is receiving
0.00194401 BTC.
0.001 BTC.
[[confirmations]]
.Confirmations
****
((("getting started", "confirmations")))((("confirmations", "bitcoin wallet quick start example")))((("confirmations", see="also mining and consensus; transactions")))((("clearing", seealso="confirmations")))At first, Alice's address will show the transaction from Joe as "Unconfirmed." This means that the transaction has been propagated to the network but has not yet been recorded in the bitcoin transaction ledger, known as the blockchain. To be confirmed, a transaction must be included in a block and added to the blockchain, which happens every 10 minutes, on average. In traditional financial terms this is known as _clearing_. For more details on propagation, validation, and clearing (confirmation) of bitcoin transactions, see <<mining>>.
****
Alice is now the proud owner of 0.002 BTC that she can spend. Over the next few days, Alice buys more bitcoin using an ATM and an exchange. In the next chapter we will look at her first purchase with bitcoin, and examine the underlying transaction and propagation technologies in more detail.((("", startref="BCbasic01")))
Alice is now the proud owner of 0.001 BTC that she can spend. Over the next few days, Alice buys more bitcoin using an ATM and an exchange. In the next chapter we will look at her first purchase with bitcoin, and examine the underlying transaction and propagation technologies in more detail.((("", startref="BCbasic01")))
David A. Harding
1 year ago
