A bitcoin payment is broadcast to the network and recorded in a block, and new blocks arrive roughly every 10 minutes on average. Each later block adds a confirmation. Once confirmed, the payment cannot be reversed; only the recipient can refund it. You can usually choose the fee, and higher fees encourage faster confirmation. Every transaction is publicly visible, the price can swing sharply, and there is no chargeback or compensation scheme.
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What bitcoin is
Bitcoin is a decentralised digital currency first set out in a paper by Satoshi Nakamoto, titled "Bitcoin: A Peer-to-Peer Electronic Cash System"1. The paper describes online payments sent directly between parties without going through a financial institution.
No company or government runs the network. Bitcoin.org compares it to email, which nobody owns, and says new issuance halves over time until it stops at a total of 21 million bitcoins2.
How a transaction is confirmed
Your wallet creates a transaction, signs it with your private key and broadcasts it to the network. Miners gather pending transactions into blocks, and each block added afterwards counts as another confirmation.
According to Bitcoin.org, blocks are added approximately every 10 minutes on average, but block discovery is probabilistic, so a confirmation can arrive much sooner or much later2. Transactions usually receive their first confirmation within about 10 to 60 minutes3.
The recipient decides how many confirmations to wait for. Bitcoin.org's guidance treats six confirmations as the minimum recommendation for high-value transfers4.
Fees
Receiving bitcoin costs nothing, but sending it requires a fee. Many wallets let you choose how much to pay, and higher fees can encourage faster confirmation2. A transaction paying less than the network is currently prioritising may wait longer4.
Fees are based on the size of the transaction in bytes rather than the amount sent2, so a small payment can carry a fee that is large relative to its value. Services that sell bitcoin or convert it back into ordinary money usually charge their own fees or spreads on top.
Reversibility
Bitcoin.org is direct about this: once confirmed, a bitcoin transaction cannot be reversed and can only be refunded by the person who received it2. There is no issuer to contact and no dispute process built into the network.
Before confirmation, a payment is not yet final. That uncertainty matters to recipients, who may wait for confirmations before treating a payment as received, and to senders, who cannot count on stopping it.
Privacy
Bitcoin is not anonymous. Bitcoin.org states that it cannot offer the same level of privacy as cash2, and that anyone can see the balance and transactions of any bitcoin address4.
If an exchange has verified your identity and you move bitcoin to your own wallet, that link exists in the exchange's records. From there, activity on the public ledger can be traced.
Price volatility
Bitcoin's price can rise or fall unpredictably over short periods4. The UK Financial Conduct Authority uses bitcoin as an example of a cryptoasset that fell by more than 30% in a single month5.
For payments, this means the value sent and the value eventually received in ordinary currency can differ, even before fees.
Security
- Lost keys: if you lose your wallet backup or recovery information, the funds can be gone permanently4.
- Theft: malware and phishing pages target recovery phrases and exchange logins.
- Address errors: bitcoin addresses are long strings, and copying the wrong one, or a lookalike planted in your history, sends funds to someone else.
- Custody risk: bitcoin left on an exchange depends on that company's security and solvency.
Scams to recognise
Bitcoin appears in extortion emails, fake giveaways promising to double whatever you send, investment platforms that never allow withdrawals, and "recovery" services aimed at people who have already lost money. The US Federal Trade Commission warns that only scammers guarantee profits or big returns6.
What to check before sending bitcoin
- The recipient is a real, identifiable party you can contact outside the transaction itself.
- The destination address is correct in full, not only at the start and end.
- The fee you are paying, and roughly how long confirmation may take at that level.
- How many confirmations the recipient requires before treating the payment as received.
- The total cost of buying bitcoin and later selling it, not only the network fee.
Using bitcoin does not change local law; for the Maldives, see the Maldives gambling bill. Wider crypto risks are covered in crypto payments.