Sending and Receiving Bitcoins Online and Offline

While bitcoin and other cryptocurrencies are digital money, you do not need an Internet connection 24/7 to receive funds. You do need a connection to spend funds.

 

Receiving Funds

For a transaction to occur on the bitcoin network, a recipient of the funds needs to generate a new address or use one of the previously generated addresses. While it is possible to use a previously generated address multiple times, for privacy and security reasons it is recommended that users use 1 address per transaction only. Every bitcoin wallet can have an unlimited number of addresses associated with it and generating a new address doesn’t cost anything. After the recipient generates an address, he or she needs to give the address to the sender of the funds.

Once you generate an address, it will remain a part of the blockchain network for as long as the network exists. The addresses do not become inactive, which means that you will be able to receive money to an address even if you are not connected to the Internet. It does not matter if you have a synchronized software wallet, a hardware wallet or a paper wallet. You will be able to receive bitcoin transactions to your address regardless of the state of your wallet as long as the wallet and the network are not compromised.

If you are offline when someone sends you funds, you will not notice the funds coming to your bitcoin wallet. However, the transaction will still occur and you will see it next time you connect your bitcoin wallet to the Internet. When you do, the transaction will show up together with network confirmations.

This is similar to what happens to your email when you are not connected to the Internet. When you are offline, your email address still has allocated server space and you can receive messages, it is just that you can only check them when you go online. You don’t know if someone has sent you a message unless you are able to check it but once someone sends a message, it will be waiting for you in your mailbox. With email, just like with bitcoin, all the information synchronizes in real time and you will be able to see it when you go online.

 

Spending funds

When you want to spend money on the bitcoin network, you do need an active Internet connection because for you to send funds you need to broadcast a transaction to the bitcoin network. You can do so using a Wi-Fi connection, a regular corded connection or a mobile data plan.

To broadcast a transaction, you do not even need to have a fast connection. The only requirement is that the connection is stable enough for you to be able to broadcast transactions. This is what bitcoin users love about the network. It doesn’t matter where in the world you are located. As long as there is an Internet connection, you can send money directly to recipients, without having to use a third-party and deal with all the issues that typically occur when you are trying to send money while being located abroad. Typically, the process of broadcasting a transaction takes about 1 second to complete.

The bitcoin network itself tracks all the transactions that occur on it. The network takes care of broadcasting the transactions and checking their validity.

 

The compilation of transactions into blockchain

The process of compiling bitcoin transactions into blocks of the blockchain is called bitcoin mining. There is more to mining than just compilation of transactions, but the complication is an essential part of the process. When miners validate a transaction, the network sends a confirmation about it. Every block of the blockchain contains information about bitcoin transactions that have occurred previously. The blockchain has information about all the transactions that have occurred on it from the moment the network was launched in 2009. You can see the information about latest blocks that are being added to the blockchain here: https://blockchain.info/. It is the goal of the network to be adding a block every ten minutes.

The network then sends the information about the transactions to all the nodes on the network. You can see the current status of active nodes on the network and their distribution by country here: https://bitnodes.earn.com/

Every block of the blockchain contains information about previous blocks. Blocks are tied together through a system of hashes, which are verification numbers. The same set of data always generates the same hash, but changing even one transaction in one of the blocks would lead to the block having a totally different hash and the block would be rejected by the network. This system guarantees the security and stability of the network.

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