You may have heard of the terms ‘blockchain technology’ and ‘cryptocurrency’ and wondering how it fits together with ‘bitcoin’.
Here’s a quick and simplified definition:
Blockchain – is a public database (some describe it as a ledger) containing all transactional information
Cryptocurrency – is a type of digital currency i.e. digital cash
Bitcoin – is a type of cryptocurrency
Sending money home or abroad
There are currently several ways to send money using your bank, or with a money transfer services.
Traditionally, when you transfer funds, money goes from one bank to another, and then to the recipient’s account. The bank acts as an intermediary for your transfer. They’ll have all your information (and often collect data about your spending habits), whether you like it or not.
There are also money transfer services like Western Union and MoneyGram are less instant, you can pay with cash and both parties go to a retail location. You can also fund those transfers from your bank account or credit card however it may take several days, and you’ll be hit with extra fees.
Venmo, PayPal, and Square Cash are some other third party services that act as an intermediary for your transfer. However, whichever the case, someone’s still holding onto your information.
Blockchain money transfer
Here’s an illustration of how blockchain money transfer works:
- Imagine that you want to send money to your cousin in Canada, Zach
- The new transaction is configured into a “block” and is shown online
- The new transaction block is sent to everyone in the network
- Everyone in the network helps validate the transaction to ensure it is accurate
- Once approved by the majority, the block is added to a chain of recorded transactions in a public ledger, the block is then added to the chain which provides a permanent, non-disputable and transparent record of the transaction
- Zach receives your money
To summarise, in this scenario, you and Zach are transferring funds to each other directly; no one acts as an intermediary. Those in the network validating the transaction – are seeing data relating to the code of the transaction, not your personal data, or Zach’s.
Wirex money transfer
Sending money via Wirex is really simple:
- Fund your Wirex account with Bitcoin
- Make a transfer to your recipient’s bitcoin wallet by clicking send and entering their public key (bitcoin wallet address)
- From there, they can use the bitcoin funds to:
- Exchange to traditional currency (Wirex app)
- Withdraw it at an ATM (Wirex Plastic Card)
- Shop online or in person anywhere Visa is accepted (Wirex Virtual/Plastic Card)
Zero blockchain fees between Wirex Community
We’ve recently upgraded our platform (in preparation for Segwit), which means internal transfers between Wirex customers are free. That’s right, there is no blockchain fee when transferring to another Wirex account.
Note*: A blockchain fee will still incur when transferring to an external (non Wirex) bitcoin address. This is a miner’s fee (as part of bitcoin’s system). Learn more about Bitcoin’s blockchain fees.
Lowest exchange rates for Wirex customers
We use a pool of liquidity providers, W-Pay, who compete for the lowest exchange rate at the time of your transaction. We are focused on expanding our network, to ensure you’re getting the best and most competitive rate, always. Learn more about W-Pay.