Bitcoin Wallet



WALLETS



Sends & Receives


Basic Function:
A Bitcoin wallet sends and receives bitcoin.

Receiving
35JZ72myPm2HUNLHq2ozA6Z2dvbmSCFV3W – this is an example of a public bitcoin address used to receive bitcoin. A wallet can generate as many unique addresses as you need.


Sending
Literally copy & paste a public bitcoin address into the “Send” field and that address (and the owner of that address) will receive the bitcoin.

Send Fee
In most cases, sending bitcoin costs a fee. The fee in most cases should be handled by the wallet software, so you don’t need to.

Back-up & Restore
Most modern wallets use a back-up method using a “seed phrase” that is used to restore your wallet or move the wallet to another device.

Additional videos/readings:

(1.) Bitcoin Q&A: How do I secure my bitcoin? (Video)

Basic Rules To Protect You And Your Bitcoin


Rule #1: Never talk or brag about your own bitcoin stash (if you have to, just say you have a tiny bit). Be discrete about all your personal Bitcoin holdings.

Rule #2: Use a non-custodial wallet (a.k.a wallets that puts you in 100% ownership and responsibility of your bitcoin). Never use a web wallet or an exchange to store your bitcoin.

Rule #3: Always use passwords and back-up important information in secure places.

Encryption


Every Bitcoin wallet allows you to add a password for increased security. Ensure you create a password and that it is difficult to crack.

Use:

1. uppercase(s)
2. lowercase(s)
3. number(s)
4. special character(s)
5. at least 8 characters

This password is the only measure preventing someone that gains access to your wallet from sending the bitcoin to their own bitcoin address. I suggest making multiple copies of your password and securing them in a secure manner.

Back-ups


Every Bitcoin wallet has a back-up feature – whether it is a back-up file, a private key or a seed phrase. You need to create the back-up, make multiple copies and store them securely. Examples include bank safety deposit box, or a fire + water proof vault/safe.

These back-up(s) are the only things that will recover access to your bitcoin if your device malfunctions, gets stolen, etc. Recovering your bitcoin is easy with a back-up – just import it into your new wallet.

Hold Your Own Bitcoin


Store bitcoin on a trusted wallet that puts you in 100% ownership of your own bitcoin. You do this by using a non-custodial wallet.

Custodial wallets hold bitcoin for many users and it is a large central stash that can ALL get hacked, seized by government, compromised via inside job, frozen for any reason or lost by incompetence. This results in you losing everything. Bitcoin puts you in control – don’t give that up.

Storing Bitcoin Offline (A.K.A. Cold Storage)


Storing your Bitcoin offline should be for long-term holdings and/or large amounts.

Storing offline means storing your bitcoin on bitcoin address(es) that were generated on a device that is disconnected from the internet and never touch the internet. If the bitcoin address(es) and device is disconnected from the internet, the only way to steal your bitcoin is by physically stealing it. But if you created a password for the wallet, they still can’t access your bitcoin without the password.

Some Offline Methods To Store Your Bitcoin


1. Dedicated offline computer: Install a bitcoin wallet via usb on a clean computer that never touches the internet. Send and store your bitcoin to the wallet and NEVER plug the computer into the internet. It is possible to do offline transactions using something called PSBT. Electrum is one wallet that can do this and all you need is a usb stick.

2. Physical material: You can write down your private key(s) and/or seed phrase on a durable, disaster resistant material. If you need to access the bitcoin, simply import the private key(s) or seed phrase into a bitcoin wallet. Generate your private key(s) or seed phrase on a clean computer that is disconnected from the internet.

A private key gives you access to bitcoin stored on the paired bitcoin address – if someone gets your private key, they have access to the bitcoin on the associated bitcoin address.

Warning for backing-up private keys: If you send bitcoin from this bitcoin address just ONCE, the remaining balance is sent to a change address (a newly generated bitcoin address by the wallet). This means that you will need to back-up those new private keys associated to the newly generated bitcoin address(es). If you are backing up the actual private keys for each of your bitcoin addresses, there should be an export all private keys option. Most modern wallets now use a seed phrase and this is more user friendly and fool proof. See below.

A seed phrase can restore access to all your bitcoin on a wallet. A seed phrase can be encrypted with a password – so even if someone got your seed phrase, they will need your password to access your bitcoin (this is not the case with a private key). Most modern wallets use this back-up method.

3. USB: You can store your private key(s) and/or seed phrase on an encrypted USB. Make sure you encrypt the USB with a difficult password and have multiple encrypted back-up USBs because they can break or become corrupted. This method requires some extra maintenance and scheduled check-ups to ensure USBs are in working condition. Only use a clean and dedicated computer that is preferably always disconnected from the internet.

4. Hardware wallet: A hardware wallet is a hybrid: you get some of the security of a device that is disconnected from the internet and the convenience of more quickly spending the bitcoin on any device you want – with minimized risks from virus infected devices. A hardware wallet connects to a device such as a computer or smartphone via USB and allows you to securely send your bitcoin. A hardware wallet will generate a seed phrase for you to back-up for restoring purposes.

Warning:

Nothing is 100% secure. Hardware wallets can be susceptible to physical attacks, so do not leave them in public. Always double check the bitcoin address you are sending to, especially if you are sending a larger amount. Viruses may not be able to steal your bitcoin through access to your wallet BUT they can subtly change the bitcoin address you are sending to with one of their own. A good hardware wallet will let you visually verify the address you are sending to.

Check out the “Choose a Wallet” tab for some good hardware wallets.
Do Some Tests

If you are sending a large amount of bitcoin to your wallet:

1. Send a test transaction to the wallet first. Just a small amount. Then check if you received it.

2. When you back-up your wallet back-up (either a wallet file, private key(s) or a seed phrase) it doesn’t hurt to test the backup to see if it actually works. Do NOT wipe your existing wallet with funds in it as your test and do not expose your backup to the internet or a compromised computer.

Wallets for Desktop

Electrum

beginner friendly

GreenAddress

intermediate users

Wasabi

privacy oriented
advanced users

Bitcoin Core (Full Node)

self-soverignty
advanced users

Wallets for Mobile

Blockstream Green

beginner friendly

Mycelium

beginner friendly


Samourai

intermediate users


HODL

beginner friendly

Hardware Wallets

Trezor
|
intermediate users

ColdCard
|
intermediate users

Wallets To Avoid


1. Blockchain.info (Reasons: Company is led by bad actor(s), SegWit addresses still not implemented, incompetent developers)
2. Custodial wallets. (Your bitcoin on these wallets are now IOUs)
3. Exchanges. (Exchanges are not wallets and bitcoin on exchanges are also IOUs)


“Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value.”
Eric Schmidt – Executive chairman of Google


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