Cash App hooks millions by making Bitcoin transfers easy. Just don't expect to use $cashtags anymore

Cash App hooks millions with easy dollar-zapping between friends using $cashtags. Super simple. Then, they bolted on Bitcoin.

Cash App has become a popular platform for users to easily buy, sell, and send Bitcoin, while also enjoying the convenience of other financial products like stock slices and a savings stash.

However, it's important to note that Bitcoin in Cash App is not a "true" wallet in the sense of self-custody. When users buy Bitcoin, it is held by Cash App, and they retain control over their assets while using the app.

If users wish to withdraw their Bitcoin to a hardware wallet or another wallet, they have the option to do so, but it requires completing an additional verification process.

Cash App provides a seamless on-ramp for individuals who are interested in exploring Bitcoin but prefer a simpler interface compared to cryptocurrency exchanges like Binance.

The app offers a streamlined experience for performing common tasks such as buying, selling, sending, and receiving Bitcoin, aiming to demystify cryptocurrency for the mainstream audience.

To send Bitcoin on Cash App, users can select the Money tab, then Bitcoin, and finally the Send button, which is indicated by an airplane symbol or arrows.

There are two paths that users can take to send Bitcoin:

1. On-Chain Bitcoin Network: This is the original and primary network for Bitcoin transactions. To send Bitcoin on-chain, users can enter the Bitcoin address they wish to send to and follow the prompts.

2. Lightning Network: This is a newer network that runs parallel to the On-Chain network, offering faster and cheaper transactions, particularly for smaller amounts. To send Bitcoin via the Lightning Network, users can select the option to pay a Lightning invoice or send to a friend who has a Lightning-enabled wallet.

It's worth noting that the feature that allowed users to send Bitcoin using another user's $cashtag has been discontinued. As of December 20, 2024, users can no longer send Bitcoin using this method.

Instead, they are required to use either a full Bitcoin address for on-chain transactions or a Lightning invoice, even if they are sending to another Cash App user.

This change aligns Cash App's Bitcoin transfer methods more closely with standard cryptocurrency practices, presenting users with a broader range of options for managing their digital assets.

Those who prefer the seamless integration of cashtags for sending Bitcoin can continue using the app and enjoy its other financial products, while those who prioritize advanced trading features or handling a wider range of cryptocurrencies may choose to explore other platforms that cater to their specific needs.

Ultimately, the choice depends on individual preferences and priorities in their crypto journey.

The Good Stuff:

* Simple interface: Perfect for beginners or those who dislike crypto jargon.

* Lightning Network: Fast, cheap, and efficient for smaller P2P sends.

* Balanced fees: Not the lowest, but competitive and transparent.

* Versatile: Buy stocks, manage savings, and use other useful services.

The Not-so-good:

* High buying fees for smaller amounts (e.g., less than $100).

* Limited crypto variety - Only Bitcoin, no Ethereum or other altcoins.

* Can be pricey for serious traders seeking the absolute best rates.

* You don't own the private keys in the same way as a hardware wallet provides.

Essentially, you trade control, asset choice, and potentially lower fees for absolute convenience and that sweet Lightning integration.

What else is out there?

Cash App isn't the only game in town for user-friendly BTC sends.

The Bottom Line:

Cash App has successfully made Bitcoin feel easy, especially with the integration of the Lightning Network for swift and affordable P2P transactions. If you're already a regular Cash App user and value convenience above all else, while mainly focusing on Bitcoin, then Cash App is a decent choice despite its quirks.

However, if you prefer to have complete control over your private keys, need to handle other cryptocurrencies, or are constantly hunting for the absolute lowest fees for buying and selling crypto, then you'll likely outgrow Cash App relatively quickly. In such cases, consider self-custody wallets like hardware wallets for full ownership of your assets or cryptocurrency exchanges for advanced trading capabilities.

It's important to be aware of the trade-offs involved, understand who holds the keys to your crypto, and select the tool that best suits your individual needs and preferences in your crypto journey.