Sending crypto to your friends and family or using crypto to pay for products and services is simple once you get the hang of it. Why would you transfer cryptocurrency rather than cash? Because crypto is digital, sending it is as simple as sending an email. Crypto does not have physical boundaries like dollars, pesos, or euros, so you can send it to anyone anywhere without disclosing your personal information. This article will guide you on how to send crypto to an external wallet address.
What is a Crypto Wallet?
A cryptocurrency wallet is where you store your proof of ownership of your cryptocurrency and digital assets and have secure access to them.
A cryptocurrency wallet does not, in reality, store your crypto in a new virtual space. Each cryptocurrency is kept on its blockchain, a global decentralised ledger in cyberspace. Your crypto wallet maintains the unique address on the blockchain where you can find your digital assets, as well as public and private “keys” used to conduct transactions.
There are two primary kinds of cryptocurrency wallets that investors should be familiar with: hot wallets & cold wallets.
A hot wallet is a crypto wallet that is in some way connected to the internet. This significantly simplifies the process of purchasing and selling cryptocurrency. Almost every wallet you use on your laptops, smartphones and tablets is a hot wallet.
A cold wallet is a crypto wallet that is not connected to the internet and is in a physical form. This almost eliminates the possibility of them being hacked, which is perfect for investors wishing to store huge amounts of cryptocurrency safely for extended periods of time. Cold wallets often look like a USB stick and operate similarly.
We’ll only focus on hot wallets and go over all you need to know about how to send your crypto to an external wallet address.
Hot Wallets Explained
Without becoming too technical, it’s critical that you avoid being confused with many sorts of hot wallets. Surprisingly, few cryptocurrency investors are aware of or comprehend the distinction between the two types of hot wallets. These are called non-custodial and custodial crypto wallets.
Custodial (Exchange-Based) Wallets
If you’ve ever registered with a cryptocurrency exchange such as Coinspot, Crypto.com or Binance, you already have a custodial wallet. A custodial or exchange-based wallet is integrated within the platform or app that allows you to purchase cryptocurrency and requires no further setup.
A custodial wallet has the advantage of being particularly user-friendly, since your exchange takes “custody” of your wallet, which leads to the fact that you take on less responsibility in terms of password storage and security management.
Custodial wallets are an excellent option for investors who want to access their digital assets instantly for buying and selling. If you often reorganise your crypto portfolio, selling some ETH in the morning and purchasing some BTC in the evening, a custodial wallet is definitely your best choice.
Non-Custodial Wallets
Non-custodial wallets, on the other hand, are often in the form of a completely independent application or software, which means that the wallet incorporates additional security features.
As you sign up for a non-custodial wallet, you’ll need to create a “seed phrase,” a 12-to-24-word sequence generated randomly, or your “keys.” While a non-custodial wallet is more secure as no third party can potentially prevent you from accessing your digital assets, you also lose your crypto if you lose your seed phrase.
Currently, some exchanges now provide their independent, non-custodial wallets that are partially connected with the native exchange. For instance, Crypto.com and Coinbase are crypto exchanges with their own non-custodial wallet applications completely independent of the exchange. Besides the security considerations, a separate wallet yields a psychological benefit, as it makes it harder to “panic sell” and easier to flex those “diamond hands.”
Hardcore crypto purists are known for repeating the phrase “not your keys, not your coins,” which effectively means that your cryptocurrency is not actually yours unless it is housed in a non-custodial wallet.
How to Send Coins to an External Wallet?
When transferring coins to an external wallet address, it is highly recommended you utilise an external wallet over which they have complete control. In this article, we selected CoinSpot to illustrate how to send your cryptocurrencies to an external wallet because CoinSpot fees are very competitive for investors and the quality of its services far exceeds that of other exchanges in Australia.
BTC Send to an external wallet address
We’ll use Bitcoin (BTC) to demonstrate how to send your funds to an external wallet.
Firstly, you need to have your receiving wallet address from your external wallet.
Locate your sending wallet
1. Choose ‘Wallets’.
Fig 1. Choosing “Wallets” on the CoinSpot page
2. Use the search function to Search for Bitcoin(1) -> Choose Open BTC Wallet(2).
Fig 2. Opening your CoinSpot wallet
Initiate your send
3. Select Send(1) in your Bitcoin wallet -> Provide the Amount, External BTC receiving wallet address(2) -> Provide your 2FA token(3) -> Select Send(4).
Note:
You can also choose ‘Send all available’ to send your whole balance to your CoinSpot account.
If you do not get App-Based 2FA enabled, you need to choose ‘Send the code through SMS’, and an SMS message with your 2FA token will be delivered to you.
If you get an invalid wallet address, please contact CoinSpot’s helpful Support staff for assistance with your send.
Fig 3. Initiating your send
Choose a Transfer Network (optional)
When withdrawing your crypto, certain coins/tokens may support numerous distinct transfer networks, each with its transaction fee. We highly recommend you to check with your external wallet provider if they support the transfer network before sending your cryptocurrency.
Please follow the steps below to send your crypto via a different transfer network.
Choose Default(1) > Choose a Transfer Network(2) to send your cryptocurrencies to.
Fig 4. A wide range of Transfer Networks.
4. A confirmation email will be sent to you; check your email inbox and confirm the withdrawal by clicking on the confirmation link.
Fig 5. Confirming your send
The coins/tokens often come soon afterwards. If the status is pending, it is advisable to contact CoinSpot’s Support staff so that they can timely support you.
Destination Tag/Memo ID
A Destination Tag/Memo ID is a unique identification code issued to identify the receiver of a transaction.
If you are trying to transfer a coin/token from CoinSpot to an external wallet, you have to check your external wallet/receiving platform’s wallet for that coin/token to determine your Destination Tag/Memo ID prior to initiating your send.
Below is the list of coins/tokens requiring their unique Destination Tag/Memo ID.
Fig 6. Destination Tag/Memo ID
Transfer Networks
Each coin/token has a unique transfer network.
To discover the transfer network used to send and receive coins/tokens to and from CoinSpot, go to your CoinSpot wallet page and click the Receives tab. From there, you can see the transfer network used.
To discover your external receiving wallet’s transfer network, review your external sending wallet’s receives/deposit page.
We’ve included an example of the transfer network used to send in ETH to CoinSpot.
Fig 7. Choosing your Transfer Networks
