What is a Bitcoin Wallet?
A Bitcoin wallet is a type of software or device designed for storing Bitcoins (BTC). To be more precise, coins cannot be stored anywhere. What we store in our Bitcoin wallets are secret keys for Bitcoin addresses, which allow us to receive or send Bitcoins.
There are several different types of Bitcoin wallets:
- Desktop wallets
- Mobile wallets
- Hardware wallets
- Online or web wallets
Desktop wallets have to be installed on your computer, and they allow you to generate a Bitcoin address and store secret keys. Some of the most commonly used desktop wallets are Bitcoin Core, Electrum, Armory and Multibit.
Mobile wallets help you complete your transactions when you are not at home and do not have access to your desktop wallet. These wallets use only a part of the blockchain. They rely on other nodes in the Bitcoin network. The main reason for this is because the blockchain network is huge (more than 100 GB), as it contains every Bitcoin transaction that has ever been made. Can you imagine the bill for your cell phone services?!
Hardware wallets are not as widespread as desktop and mobile versions. They store secret keys on devices such as USB sticks or even hand bands. One of the most popular hardware wallets is Trezor.
Online (web) wallets allow users to access their secret keys from web browsers on any device. Keys are stored on a third party computer. This is one of the biggest flaws of this type of wallet—people who run these websites can potentially take advantage of the information they have without your permission.
What is a Vault and How Does It Work?
A vault is a place where you can store your Bitcoins, similar to a savings account. It is convenient for those who own a large amount of this cryptocurrency and would like to keep it in a place that provides extra security. There is even an option that several parties have to approve every transaction, which is called a group vault. Additionally, Bitcoins cannot be withdrawn immediately from the vault. It takes 48 hours to complete a transaction. During this period, you can cancel the withdrawal.
The most important thing is that only the account owner can request the withdrawal. Other designated parties do not have this privilege, so make sure that those who you have assigned to approve your transactions are people you can trust.
An individual vault is a vault where only the account owner is responsible for approving transactions and withdrawals.
Some users feel comfortable with the security of vault platforms, while others claim it is never a good idea to store a large amount of Bitcoin funds online using a third party.
What is a Keychain and How Does It Work?
When speaking about wallets, vaults, keyphrases and BTC addresses, one should always consider using a little piece of software to act as a password manager of sorts that would store and preferably encrypt all your confidential information in one secure place. You can store your private and public keys in two ways—you can install a dedicated software program or opt for a BTC wallet that provides this service as a feature, like mSIGNA.
- For example, Mac computers have Keychain Access already included as a system utility. The beauty of this application is that it can store all kinds of data, not just passwords for websites and credit card numbers, PINs, files, but in this case relevant, private keys. A similar system is 1Password or the free and open source KeePass, which works on Windows and Android as well.
Synchronizing between different devices and applications can be a bit of a nuisance, but there are plenty of simple tutorials online that you can use to export/import your keychains.
- It basically requires that you save your passwords and keys as a CSV file in Keychain Access, and then install an older version of 1Password (that has already supported CSV files).
- After this, import the CSV file, and then save the file with the default 1Password extension (1PIF data file).
- The newest version of 1Password will have no problems importing this file and you’ll be ready to go.
- (A little note, though: The CSV file and the 1PIF file both contain your information unencrypted, so you should probably delete these two files after you’ve successfully imported your data into the newest version of 1Password.)
- If you’re using mSIGNA as your wallet, it is even easier to export and import your keys, and to move them from one computer to the other. The process is quite simple:
- Click on the Keychain menu and right-click on one of the keychains.
- Select Export Private Keychain. This will generate a .priv file containing your private keys.
- If you choose Export Public Key, this will generate you a .pub file that contains your public keys. You can now use this file and share it with other people or on different devices that you wish to make part of the existing mSIGNA account.
- Importing keys, private or public, is also simple. From the same menu, select Import Keychain.
Why do many users opt for mSIGNA? Well, it has all that you need in one place—you only need one application that does everything. The second reason is that it is a free and open-source application. And the third reason lies in the fact that it is supported on Windows, Mac and Linux-based computers, which is quite convenient.
Different Currency Units
When I started writing this article, Bitcoin price was almost $17,000. Two days later, it dropped down to $13,000. However, this is still a lot of money, and it’s understandable why there is a need for smaller units of this cryptocurrency. It would be pretty inconvenient to be able to buy only an entire Bitcoin when the price is this high. Also, one BTC is too much money for a regular purchase. Therefore, a Bitcoin had to be broken down into eight decimal pieces. The smallest part of BTC (0.00000001) is called Satoshi, and if you are familiar with the history of this cryptocurrency, you know that the person who invented the entire BTC concept went by the name Satoshi Nakamoto.
Finney is the equivalent of 0.0000001 BTC, while micro-Bitcoin or Bit (μBTC) equals 0.000001 BTC. MilliBit or milli-Bitcoin (mBTC) represents the same amount as 0.001 BTC, while one-hundredth part of BTC is called cent-Bitcoin or Bitcent (cBTC). Deci-Bitcoin or deciBit (dBTC) has the same value as 0.1 BTC.
Here are some examples of BTC units larger than one Bitcoin:
- DecaBitcoin (10 BTC)
- Current block reward (25 BTC)
- Original block reward (50 BTC)
- Hectobit or hecto-Bitcoin (100 BTC)
- KiloBitcoin (1,000 BTC)
- MegaBitcoin (1,000,000 BTC)
- Algorithmic Max (20,999,999.9769 BTC)
Bitcoin Wallet Best Practices
The quality of Bitcoin wallet services is measured by how secure they are. Special attention is paid to hot storage security (security of online wallets). One of the most popular hot wallets is Coinbase.
Coinbase primarily operates as a Bitcoin exchange market where the user can buy or sell their Bitcoins. However, the website also offers wallet services.
In order to create a Coinbase wallet, you have to sign up on the official website. The next step is to type in your credentials, verify your email and add two-factor authentication, which as an important feature because it provides extra security. As a Coinbase user, you are able to create a vault where you can keep the funds you do not want to spend.
When it comes to cold storage (offline wallets), the most commonly used hardware is Trezor. It comes in the form of a small device that looks like a USB stick. The primary purpose of this tool is to store a substantial amount of Bitcoins or some other cryptocurrency. Therefore, it is not convenient for beginners and individuals who use their BTC for everyday purchases. Some of Trezor’s features include a password manager, two-factor authentication, GPG (GNU Privacy Guard) encryption and password-less login. It can also be integrated with other devices and wallets.
Because it is designed to store large amounts of cryptocurrency, Trezor is more of a vault than a wallet. The price of the device is $105.
How to Control Your Private Keys
A private key is a number generated by your Bitcoin wallet that enables you to spend your BTC. It starts with the number “5” followed by random numbers and letters.
The only thing you need to finalize the transaction is your private key. The public key is a number that is shared with the purpose to identify the sender and the receiver. Private key, on the other hand, should never be shared and should be kept safe and secure at all times.
You can encrypt your private key and save it in the wallet file or on your computer. However, most people use paper wallets to save their private keys.
Even though paper can be destroyed and ink can fade away, most Bitcoin owners still claim it is the safest way to store private keys. In order to create a paper wallet, you will need a computer that is completely malware-free.
The next step is to go on a Bitcoin paper wallet website such as bitaddress.org. Once the websiteis loaded, you should save the webpage and disconnect your computer from the internet. While your computer is still offline, open the file with the website in it. By moving your mouse several times, you will generate some random numbers. For the more advanced version, you can even encrypt the key.
The final step is to print your wallet or save it on your USB stick and put it in a safe place. You will also notice that the private key is on the right side of the paper, while the public key is on the left.
Now, you may be wondering: “What if I generate a key that already exists?” Your address (key) consists of so many digits and letters that there are endless possibilities for combining them. Therefore, the chance of generating a key that is already in use is practically zero.
How to Protect Your Privacy Using Bitcoin Wallets
When it comes to anonymity, Bitcoin transactions are both private and transparent. How is that even possible? Well, the only trace of the transaction is the address. It can imply where Bitcoins are located and where they are going. Once the transfer is completed, the transaction is saved in the Blockchain along with millions of other transactions since the very beginning of this cryptocurrency.
So what can we do to ensure privacy? First and foremost, do not reuse addresses. For every purchase, use a new address. Do this so no one can associate that all your purchases were made by the same person. For example, if you lose your wallet (real, physical wallet) and you kept all your receipts in it, if somebody finds it they can conclude that one person (you) have made all the purchases.
Another thing you can do is hide your IP address by using a VPN service, or both for that matter. This is important because your transactions can be matched to your IP address. You should also encrypt your backups, chats, emails and browsing data.
Use different wallets for different sums of money or different purposes. For example use separate wallets for your private purchases, donations, storage, etc.
Another helpful privacy tip is not to share your public address on social media, websites or emails.
You can also mix your Bitcoins with other people’s Bitcoins, which will make them less traceable. That can be done by using bitcoinmix.org. If you want Bitcoinmixer to do its magic and tumble your Bitcoins, first you will have to enter the address where you want your Bitcoins to be sent to. Once you have followed all the instructions, you will be able to send your BTC to the address provided to you. Shortly after that, your Bitcoins will be returned to you to the specified address. However, you will have to pay for this service.
Bitcoin Wallets Safety
If you want to keep your Bitcoin wallet safe or at least as safe as possible, there are several guidelines you should follow:
- Choose trustworthy online services
Before you create an online wallet, do your research. Go through users’ reviews and make an informed decision.
- Use two-factor authentication (2FA)
By setting up another login credential, your password will no longer be the only piece of information an intruder needs to take over your account. For example, if you log in to your account, the website will ask you to enter your phone number for them to send you a code. You will later enter the code and be able to access your account.
- Do not keep massive amounts of Bitcoins in hot storage (wallets that operate online).
For Bitcoins you do not have the intent to spend, it’s better to use cold storage (hardware wallets).
- Backup the entire wallet, not only your private key.
The process of backing up your wallet depends on whether you want to backup the Blockchain as well.
If you want to backup only the wallet, you should open disk utility settings, select the new image option, choose 128 or 256-bit encryption, save it on Tresorit—a service similar to Dropbox, but it does not save the encryption key—or some other safe file-sharing service. Then, enter the password and move the wallet.dat file to the image.
The final step is to symlink it in -s /Volumes/Bitcoin/wallet.dat ~/Library/Application Support/Bitcoin/wallet.dat. Before you open your wallet, you will have to mount the image. When you are done, do not forget to unmount it. For extra security, save the backup on different locations, such as USB sticks or CDs.
Additionally, backup the wallet on a regular basis.
- Encrypt the wallet as well as the wallet backup.
Encrypting your wallet and the backup is always a good idea, especially if the backup is stored online.
- Keep your password in a safe place.
You can encrypt and save your password on your computer, or simply write it down and store it somewhere safe. When choosing the password, use a special program that will generate the password for you.
Some other key guidelines for keeping your Bitcoin wallet safe include:
- Always update your operating system and walled software when recommended.
- For big transactions, use the multisignature option (explained a bit later in the text).
- Monitor your transactions.
- If you have a large number of Bitcoins on a hardware wallet, encrypt your PIN and secret recovery phrase and keep them somewhere safe, such as vault.
How to Store Bitcoins on Wallets
If you have already installed your Bitcoin wallet, the next logical step is to store some BTC in it. But first, you will need to purchase them. The easiest way to do that is with Coinbase (mentioned briefly above) or Coinmama. Coinbase offers the lowest fee, so we will focus on this platform.
The first step is to open an account on Coinbase. You will have to fill out the form, chose your password, enter your credit card number and verify the ID. Once the process is completed, you will be able to purchase Bitcoins.
The next step is to store the Bitcoins you have just bought in your Bitcoin wallet. While you are still on the Coinbase website, on the left side of the screen, you will see the send/request option. If you click on that, the recipient field will show up. This is the place where you enter the address of your wallet. You can also choose the amount of BTC you want to send and even if you would like to transfer the funds using Bitcoins or USD. Then Coinbase will ask you to confirm the transaction. Once you click confirm, your BTC will be transferred to your wallet.
How to Move Wallets From One PC to Another
The simplest and easiest way to avoid the issue of moving your wallet to another computer is to use online wallets. This way, you can log into your wallet from any device no matter where you are. If you already have a desktop wallet and you need to move it to another machine, this might be a problem. Using Dropbox may seem like an easy fix, however, Dropbox and other similar services might compromise your security.
- The first thing you should do is to close the wallet on your old PC.
- Then locate your wallet’s folder.
- Find the wallet.dat file.
- Copy the file.
- Find the same file on your new computer.
- Replace wallet.dat file with the old one (make sure that there are no Bitcoins in the wallet on the new PC).
- Run your wallet with the –rescan setting (find the wallet location, open the folder, press shift, right click and select “Open Command Window Here,” type bitcoin-qt.exe –rescan into the command window and press the enter button).
If you have a large amount of BTC, make sure to always backup your wallet just in case this method does not work, so you do not lose all your Bitcoins. After all, there is a reason why desktop Bitcoin wallets are not designed to be shared.
How to Recover Your Bitcoins With a Secret Phrase if You Lose Your Wallet
In most cases, backing up your wallet means generating and saving a secret recovery phrase. If you lose your password, this might be the only way to avoid losing your funds permanently.
But first, let’s discuss what a secret phrase is:
A secret phrase or seed is a list of random words that you should save in a secure place just in case you forget or lose your password. If you are using Blockchain, for example, to restore your wallet and your Bitcoins, you will have to enter the phrase in the field in the help section. This way, you will regain access to your funds as well as your recently received BTC.
We have already mentioned hot and cold wallets; now we will break it down.
The hot wallet is a Bitcoin wallet that operates online. This includes desktop, mobile, and web wallets. Because this type of Bitcoin storage is constantly connected to the internet, it can be hacked. Therefore, it is not recommended to keep large amounts of BTC in hot wallets because hackers can gain access to your private keys—and we all know what that means.
A positive component to these wallets is that funds can be almost immediately withdrawn, which makes them convenient for everyday purchases. However, most providers of this service will not allow you to withdrawal a large amount of Bitcoins instantly.
Cold storage is a Bitcoin wallet that operates offline. We have already talked about several types of cold wallets—hardware wallets, paper wallets, CDs or USB sticks. Many people find it more secure than hot wallets because hackers cannot access them. They are convenient if you have large amounts of Bitcoin funds that you do not need for everyday purchases.
Cold storage pros:
- Safe from malware.
- Safe from hackers.
Cold storage cons:
- They can be stolen or lost.
- The device that holds your private key can be damaged.
There is even something known as deep cold storage. Deep cold storage keeps your private keys offline in a safe place by using encryption. You can give the password for decrypting the wallet file to someone you trust, like your closest friend or a family member.
You can even make two copies (just in case you may need it) and give it to another friend. That way if someone steals your wallet, they wouldn’t be able to do anything with it because it is encrypted. On the other hand, you also would not be able to do much because…well, it has been stolen. So, the idea of having two copies of the wallet and saving them on two separate locations seems like a good one.
Multisignature wallets offer users additional security features. In order to authorize the transaction, at least two signatures are required. If you want to purchase an item using Bitcoins, another person will have to provide his or her authorization.
In addition to Coinbase, other wallets that offer multisignature services include:
To be able to share a wallet with someone, you have to install it first. Once you have created the wallet and backed it up, you will be able to set up a shared wallet. If you use BitPay, for instance, you will see a plus sign on the right side.
Choose your wallet’s name and the number of signatures required for transactions. Once you do this, you need to send invitation code to people you want to share your wallet with. Those who receive the code also have to install the wallet and enter the username and invitation code. After they do that, your multisignature wallet is created, and you can safely transfer your funds.
A Bitcoin wallet can be either hardware or software designed for storing private and public addresses for your Bitcoins.
Wallets can be cold or hot. Cold wallets operate completely offline and are recommened for storing large amounts of Bitcoins. Hot storage is a wallet connected to the internet, and is convenient for everyday purchases.
No matter what type of Bitcoin wallet you use, make sure to follow all the guidelines regarding security to avoid any potential loss of your funds.
Setting up a Bitcoin wallet is mostly a simple procedure, especially if the wallet you’re using doesn’t require you to download the entire blockchain. No matter which software you choose, certain steps are always the same. You will have to download a wallet file and go through the installation wizard which is quite straightforward.
In this article, you will find useful information on how to set up the most popular wallets, how to open a vault, send and receive Bitcoins, sync your wallet on multiple devices, recover your funds, cancel transactions, use keychain(s), and how to stay safe while using the wallet.
One of the features that Exodus creators are especially proud of is app design and user-friendliness. The downside is that the app is not available for mobile use.
But the benefit is that Exodus wallet supports not only Bitcoins but also Ethereum, Litecoin, Gnosis, Qtum, SALT, Decred, Civic, and many other cryptocurrencies. In addition, the wallet is compatible with a cryptocurrency exchange service called ShapeShift.
The software can be run on Windows, Linux and Mac OS.
How to Set up Exodus Wallet
If you are a Windows user, first you will have to install the .NET Framework 4.5.2 from Microsoft.
- Then, download wallet’s software from the company site. One major pro to this wallet is that you do not have to download the entire blockchain.
- Run the installation wizard and follow the instructions similarly as in previous examples.
- When the installation is completed, you will be able to run the program.
- In the Wallet section, you can choose which cryptocurrency you would like to use.
- The wallet will also ask you if you want to restore your old wallet or to start sending and receiving funds with the new one.
- In the Exchange section, you can exchange cryptocurrency to any other from the list.
You can also customize your wallet by selecting a theme according to your preferences, even though the default design is quite attractice and intuitive.
If you want to deposit Bitcoins on your exodus wallet, you will have to go to the Wallet section, then choose Bitcoin/Receive and you will be provided with a receiving address.
Sending funds with Exodus is also very simple. All you have to do is click Wallet/Bitcoin. Enter the recipient’s address and hit Send.
Make sure your operating system is always updated and that your password is strong. Do not use the password for Exodus on any other website.
Unfortunately, the wallet does not offer a multisignature option or two-factor authentification. However, your wallet will constantly be backed up and your private keys will not be stored on the company’s servers.
If you own a large amount of Bitcoins, consider using a different wallet because Exodus does not offer cold storage services.
As already mentioned, Exodus operates only as a desktop wallet. Therefore, it is not possible to synchronize it with your mobile app.
Once the pending tag disappears from the transaction, it can no longer be reversed or cancelled. If your transaction is pending for longer than three days, refresh the account and you will get your Bitcoins back.
Recover Exodus Wallet
If you need to restore your wallet, the link will be sent to your email address, but you will have to enter a secret recovery passphrase and the Exodus key. If you forget your passphrase, you can restore it by clicking on the password section.
Electrum is one of the most commonly used hot wallets. It is convenient for storing small amounts of Bitcoin needed for everyday purchase.
The wallet is beginner-friendly, but it does not lack in security.
How to Set up Electrum Wallet
In order to start using Electrum, you will have to download it here. There are several download options depending on your operating system (Windows, Linux, OSX or Android).
- The installation is simple. All you have to do is to run the installation wizard and follow the on-screen instructions.
- Once the installation process is completed, you will have to connect to a server. The wallet offers two options—auto connect or select a server If you’re a beginner, feel free to click the first option.
- The next step is to choose what kind of wallet you want to create. There are several options available:
- Standard wallet
- Watch Bitcoin addresses
- Wallet with two-factor authentication
- Multi-signature wallet
- In order to generate a seed (a secret recovery phrase), you should check the Create a new seed box. The wallet will then create a phrase that consists of twelve random words. You should write these words down because if something happens (for example, your computer becomes infected with malware), this might be the only way to recover your funds.
- The software will ask you to rewrite and confirm the seed.
Another security feature is the wallet’s encryption. You will have to enter and confirm the password. This step is the final phase of the setup process.
Electrum uses micro Bitcoins as a default Bitcoin unit. If you find this confusing, you can change that in the Appearance section.
How to Open an Electrum Vault
Electrum offers cold storage option for bitcoins you do not want to spend.
If you want to create offline wallet (cold storage or vault), you will have to install it on a computer that’s not connected to the internet.
- The first step is to create a new wallet by clicking File/New, and name the wallet. You can create any type of storage except for watch Bitcoin addresses, which are public Bitcoin addresses assigned to your wallet.
- Create a new seed and write it down.
- This time, you will need a master key that you can find in Wallet/Mater Public Keys. Copy the key and paste it into your online wallet.
- The next step is to create the watch-only online wallet.
- The procedure is similar to the previous example. However, instead of selecting Create a new seed, select Use public or private keys. This is where you paste the master public key.
- To send funds to your offline wallet, you will have to fill the transaction form in your watch-only wallet and click Preview. Save the file on your USB stick.
- Open your offline wallet and click Tools/Load transactions/From the file, and select the file from your USB device.
- Click sign and save the file on your USB stick.
- Go to your online wallet, click Tools/Load transactions/From file, and click Broadcast.
If you want to receive Bitcoins or to make a deposit, you will have to click on the Receive tab to find your receiving address. If you want someone else to send Bitcoins to this wallet, you will have to give them this address.
To send Bitcoins to someone, you will have to be familiar with their address.
- If a person provides you with their public key, you can click on the Send button in your wallet, and enter the address in the Pay to field.
- Before this step, you can add the address to your contacts, but this step is not mandatory.
- Enter the number of Bitcoins you would like to send and add a description.
- When you click send, you will have to enter your password before the transaction is completed.
Electrum provides a high level of security despite being an online wallet. However, do not keep all of your Bitcoins in hot wallets.
Electrum offers an encryption feature so nobody can access your private keys even if your computer falls victim to a cyber attack.
Make sure you keep your seed (secret recovery phrase) in a safe place. You can even make several copies and store them in different locations.
For extra security, the wallet offers a 2FA and multisignature feature.
Electrum uses a label sync plugin that enables users to sync across multiple devices.
You can find this feature in Tools/Plugins. Click on Label Sync/Settings/Force Upload. This will sync the label on every device with the same wallet installed.
Unfortunately, if you authorize a transaction and send the funds to the wrong address, there is not much you can do to reverse the transaction. Your funds are probably lost. Some users claim that you can double-spend the Bitcoins which means you will have to pay a higher fee, but at least you might get your money back.
To avoid these situations, make sure you have the right address. Otherwise, you can also use the multisignature feature.
In order to recover your Electrum wallet, you will have to enter the secret recovery phrase (seed). The restoration process is quite simple:
- Download the wallet.
- Click File/New, Restore.
- Enter the secret recovery
The software will ask you to enter the password, but you can also select a new one.
Bitcoin Core is another popular wallet. However, setting up this wallet might be a little tricky and time-consuming. Also, you will need enough free space on your device because in order to install the Bitcoin Core wallet, you will have to download the entire blockchain first.
How to Set up Bitcoin Core Wallet
Download the wallet from the link by clicking here. When the download is finished, open the file and follow the instructions of the installation wizard. When you run it for the first time, the software will download the entire blockchain. It can take days for the process to complete.
When the installation is finally completed, you will be able to use your wallet. In the File section, you can see several options:
- Open URL
- Backup wallet
- Sign message
- Verify message
- Sending addresses
- Receiving addresses
In the Settings option, you can choose to encrypt your wallet.
An important step is to use a reliable source for downloading the wallet such as Bitcoin.org. There are several similar looking websites that offer the Bitcoin Core download. However, the software is not genuine, and you could end up losing your Bitcoins.
How to Open a Bitcoin Core Vault
Similar to the previous example, you can install an offline version of the Bitcoin Core wallet on the computer that is not connected to the network. You will also need to create the watch-only online wallet. Transactions made online will not be signed. You will have to copy them to your offline wallet and verify them. The procedure is the same as for the Electrum wallet.
If you want to add bitcoins to your wallet, you have to go to the File section and click on the Receiving addresses. Copy the address and send it to the person you are buying the Bitcoins from.
If you want to make a purchase or just send Bitcoins to someone else, follow these steps:
- Click on the Send section and fill in the form. The recipient’s address should be entered in the Pay to field.
- Note: Make sure you have the right address because if you make a typo, your funds will be permanently lost.
- The fee you are willing to pay is up to you. If you set the fee too low, your transactions might not be finalized, but your Bitcoins will be returned to you.
- When you click Send you will have to enter the password, and by clicking the OK button, your Bitcoins will be sent to the recipient.
If you choose to encrypt the Bitcoin Core wallet, which is highly recommended, make sure to select a secure password that contains random characters, including upper and lower case letters along with symbols.
Write the password down and store it in a safe place (not on your PC). Keep in mind that if you lose your password, you will also lose your funds.
Before every transaction, backup your wallet and use every address only once.
Bitcoin Core operates by using a large peer-to-peer network which makes transactions difficult to track. Another perk of using the Bitcoin Core wallet is its compatibility with the Tor browser.
Bitcoin Core does not have a mobile version of a wallet. Therefore, synchronization with a mobile device is not possible.
Once you click OK and send the funds to the recipient, there is no way you can cancel or reverse the transaction. For that reason, make sure you have the right address and be careful when filling out the form.
Recovering Bitcoin Core
Recovering your Bitcoin Core wallet can be a tricky process.
- First, make sure to backup your wallet as often as possible, and keep the copy of the wallet.dat file on your USB stick or some other offline device.
- If your wallet has been corrupted, you should reinstall it. When the installation is completed, go to the %userprofile%\AppData\Roaming\Bitcoin file and replace it with the version from your USB device.
- Keep in mind that this method might not work.
Armory is another popular hot Bitcoin wallet that started the entire concept of cold storage. Its creators and users claim that Armory provides a high level of security along with a user-friendly interface.
How to Set up Armory Bitcoin Wallet
To be able to use Armory, you will have to download the software first. The installation process is simple, and all you have to do is follow the instructions.
- The first step in creating your new Bitcoin wallet is to name it and add a description.
- You will also have to choose target to compute time and max memory usage. If you are not sure what to select, you can always opt for the default settings.
- The next step is to enter encryption passphrase that must contain at least 10 characters or six random words.
- Save the passphrase and store it in a safe place.
- The wizard will then ask you to re-enter, confirm and verify your passphrase.
- The next step is to backup your wallet and to install Bitcoin Core because Armory uses the entire blockchain.
- When the Bitcoin Core is downloaded, restart your wallet.
How to Open an Armory Vault
Setting up an offline wallet or cold storage does not differ from the previous examples. It operates on the principle that private keys are kept in the offline wallet, while the online wallet is watch-only.
To receive bitcoins, you will have to click Receive bitcoin section. The wallet will automatically generate the address, and you will be able to copy it and send it to the person who wants to send you BTC.
To send Bitcoins to a specific recipient, click on Send Bitcoins and fill out the form. Make sure to enter the correct address and click Send.
When it comes to the Armory wallet backup, the software offers two options depending on your preferences:
- You can backup your wallet in a paper form or as a digital backup.
- Armory also provides a feature called fragmented backup. It means that you will need several fragments to restore your wallet.
To create a fragmented backup, you will have to:
- Open the properties section.
- Click Backup this wallet, Other backup options and choose Fragmented backup.
- After you enter your passphrase, you will be able to determine how many fragments you want and how many of these parts will be needed to restore the wallet.
The entire Armory wallet is encrypted and can operate offline, which is convenient for storing a significant amount of BTC.
Armory also offers a multisignature transactions feature called Lockbox.
Armory is not designed to be run on multiple devices at the same time. You can try to sync it by copying a wallet.dat file from one device to another. This might not work, and wallets can eventually get out of sync.
Similar to other online wallets, once you click Send, your funds are permanently gone. However, if you use a multisignature wallet, the transaction is not finalized until all parties approve it. Therefore, if you changed your mind, make sure you tell your friend or family member who is authorized to approve the transaction not to do it.
What happens if you forget your passphrase?
- You should simply click the Import or restore wallet section, select your backup option, and click Continue.
- The next step is to enter the code from your paper or digital backup into the root key field.
- Click Restore wallet and type a new
- Do not forget to save the new passphrase.
… There you have it—even though there is a great number of wallets out there, all offering different, yet similar features, the setup process is more or less the same and self-explanatory.
The above mentioned wallets are considered the most reliable by the Bitcoin wallet user base.
How to Set Up a Mobile Bitcoin Wallet
If you need easy and quick access to your Bitcoins for small everyday purchases, a mobile wallet is probably a good way to go. However, it’s important to avoid keeping a large amount of Bitcoins in your mobile wallet due to potential security issues.
This article will act as a comprehensive and easy-to-follow tutorial on how to install and configure three of the most popular mobile Bitcoin wallets for Apple iOS and Android devices.
How to Set Up Bread Wallet
Once you have done that, follow these steps:
- Choose whether you want to recover your old wallet or to create a new one.
- You will have to generate a secret recovery phrase in case you lose your phone.
- Write it down and store it somewhere safe. Make several copies and place them in different locations. This will allow you to recover your funds if something goes wrong.
- As you can notice, you do not have to create an account, sign up or sign in, which is very time-saving.
The interface of Bread wallet is user-friendly, and the app is intuitive and simple to use. Every step of the installation process is more or less self-explanatory. You can navigate through the app by swiping right and left.
Once you have generated your secret recovery phrase, the window with your receiving address will appear.
- You can scan your QR code or copy the address in the old-fashioned way. You can provide the address to a person who wants to send you Bitcoins or you can send BTC to yourself from another wallet you own.
- In the top left corner of the app, you can find the Confirmation Once the transaction is finalized, you will see the notification here.
- You can either scan the QR code or enter the address manually, via clipboard.
- Make sure to double-check if the address is correct. Otherwise, your funds will permanently be lost.
- Once you’ve completed all the required steps, enter your PIN code and click Send.
In Settings, you can add or change your PIN which is required to be able to send funds. To be able to do that, you will need the secret recovery key.
The app keeps your entire wallet encrypted all the time.
Recovering Your Wallet
As already mentioned, make sure to write down and store your secret recovery phrase, because that is the only way to restore your wallet.
If you initially forgot to do that, do not despair—you can always find the recovery phrase in the Settings section.
Another widely used mobile Bitcoin wallet is Mycelium. One of the biggest advantages of this wallet is that it provides cold storage. The app works great combined with Trezor.
Mycelium is an HD wallet, which means that addresses are never re-used, and you can manage several accounts.
In the Transaction history tab, users can keep track of every transaction they have approved, while in the Address book you’ll find the addresses you can send funds to on a regular basis.
How to Set Up Mycelium Wallet
- Download it and install it. This process does not differ much from any other app installation.
- The next step is to generate a secret recovery phrase, also known as seed.
- Needless to say, write the seed down and store it somewhere safe.
- You will also have to generate a PIN required for sending funds.
- You will be presented with the address you should send to the person who wants to send you Bitcoins.
- You can scan a QR code or simply copy and paste the address.
In the same Balance tab, chose the option Send.
- Enter the recipient’s address and double-check it.
- Enter your PIN code.
- Hit Send.
Your private keys are not stored on the company’s servers, but only on your phone.
Mycelium offers watch-only accounts for tracking the outputs but without the ability to spend funds.
Recovering Your Wallet
- A list of random words will pop up, and you should write them down.
- After you retype the phrase, the backup process will
- Once it is completed, you will no longer be able to see your backup phrase without the PIN code.
If you need to restore your old wallet, you will have to download the app on your new device.
- Once installed, select the Restore your wallet
- Enter the secret recovery phrase. Leave the password section empty.
GreenBits is a mobile Bitcoin wallet with a high level of security. A not-so-impressive interface might be the only downside of this app.
GreenBits also supports hardware wallets, such as Trezor, and allows instant transactions.
If someone sends you funds, it takes time for the transaction to be confirmed. In the meantime, a sender can double-spend Bitcoins, and you can lose the funds.
GreenBits guarantees that they will not allow the transaction of Bitcoins that have already been spent, which brings us to instant transactions—your Bitcoins will not be double-spent, and you do not have to wait for confirmation.
How to Set Up GreenBits Wallet
- After you install the app, you will be presented with a 24-word secret recovery phrase.
- Write the phrase down and store it somewhere safe.
- You also have to set up a PIN code so you can access the app and send funds.
- The user interface is divided into three sections—Receive, All and Send.
In the Receive section, you can find the receiving address.
- A person who wants to send you funds can scan it, or you can send it to them by using the copy/paste method.
- Your funds will later appear in the All
- If you want to send Bitcoins to someone, go to the Send
- Fill in the transaction form.
GreenBits offers two-factor authorization, and for that purpose, you can use SMS service, Google Authenticator or email.
Besides watch-only accounts, multisignature is another great security feature. In order to finalize a transaction, you will need a confirmation from a pre-determined number of parties.
If you want to send your Bitcoins to someone, you need the company’s approval (signature). But what will happen if the service goes down? For that purpose, GreenBits pre-signs transactions so that clients do not lose their funds. This service is called nLockTimetransactions.
Additionally, mnemonics are encrypted, and the same addresses cannot be used multiple times.
Recovering your Wallet
To be able to restore your wallet, you will need to enter your secret passphrase. Therefore, do not forget to store the passphrase somewhere safe after installing the wallet.
If you had forgotten to do that, use your PIN to access the wallet and find the passphrase in the Settings section.
Copay is a Bitcoin wallet that guarantees safety to its users. It comes in web, desktop and mobile versions. The app offers a mutlisignature feature and doesn’t use third-party storing services. Also, Copay is an HD wallet, which means for each transaction, a new address is generated.
How to Set Up Copay Wallet
The entire process is pretty straight-forward:
- Once the download is completed, you will be able to install the app by following instructions provided by the installation
- The app will prompt you to choose whether you want to start a new wallet or to restore the old one. After a quick tutorial, you will be able to create a wallet.
- The next step is to enter the email address to be able to receive notifications about transactions.
- Click Continue and confirm if the address is correct.
- Copay will then ask you to backup your wallet, which you can postpone. However, it is highly recommended go through with it.
- If you have selected the option to backup the wallet, the app will warn you not to share your backup phrase with anyone.
On the home screen, you can manage your wallets, buy or sell Bitcoins, or purchase Amazon gift cards. Also, you can see your recent transactions.
In the Wallet section, you can:
- Add a new
- Create a shared wallet.
- Join a shared
- Import a wallet.
In the Receive tab, you will be presented with a receiving address in the form of a QR code and a conventional string of random symbols. A person who wants to send you Bitcoins can either scan the QR code or you can copy/paste and send them the address. Below, you can select the option to request a specific amount of Bitcoins.
- The next tab is called Scan.
- You can scan someone else’s QR code and send them funds. The scanned address will appear on the Send
- You can now add the number of Bitcoins you would like to send.
An average transaction confirmation time is 20 minutes. However, you can change that by setting the fee to urgent or priority. If you want to lower the fee, select normal, economy or super economy.
You can lock your wallet by entering a PIN code or scanning your fingerprint. As already mentioned, you can backup your entire wallet, but make sure to store a recovery phrase safely.
Copay uses full the Bitcoin payment protocol, which means that the app always checks if the payment is sent to the right address.
Another one of Copay’s important features is a multisignature service. If you select to use this option, a predetermined number of authorizations will be required to complete the transaction.
Recovering Your Copay Wallet
If you lose your mobile device, you can still recover your old wallet:
- All you have to do is download the app, and instead of Create a new wallet, select
- You will be prompted to enter your secret recovery phrase.
Another popular Bitcoin wallet amongst iOS users is Airbitz. The app allows users to buy or sell Bitcoins, and to send and receive funds. What makes this application unique is the fact that you do not have to remember the passphrase. To access the app, you only need the username and the password.
How to Set Up Airbitz Wallet
- As you could notice, the first step of setting up any mobile Bitcoin wallet is to find it in the Apple App Store or click here to find it in the Google Play store, then click
- Airbitz will then ask you to choose a username and password and to set up a PIN code.
- Make sure to go to settings and set up password recovery. Needless to say, if you forget your password, your funds will be permanently lost.
- You will also have to allow access to the camera so the app can scan QR codes.
- Airbitz will also need access to your location if you want to receive information about bars, restaurants and coffee shops in your area that allow Bitcoins as a payment option.
If you want to receive payment, follow these steps:
- Click the Request
- You will be able to see the receiving address which can be scanned.
- Or, you can just send it to the second party via Bluetooth, email or SMS.
To send Bitcoins, you will have to:
- Click the Send
- The sending address can be scanned, entered manually or received via Bluetooth. You can even use an image to enter a public key.
- Another great Airbitz feature is that you can select a contact from your address book to send them Bitcoins.
In order to use your Airbitz wallet on several devices, all you have to do is download the app and log in with the same credentials. The wallets will automatically sync.
Airbitz is an HD wallet, which means that it generates a new address for every transaction. Also, the app keeps your wallet encrypted all the time.
Airbitz provides two-factor authentication, but you will not have to enter a code, just go to settings, enable 2FA, and type in your password.
Recovering Your Airbitz Wallet
If you lose your phone, do not worry—just download the app again and log in with your old password and username. The old wallet will be immediately ready to use.
Setting up a mobile Bitcoin wallet is almost always self-explanatory and simple. Make sure to follow all the guidelines, especially regarding security and privacy.
Your choice of which application to use is completely up to your needs and preferences. But one thing is common for all mobile wallets—do not keep a large number of Bitcoins in these apps. For this purpose, you should instead opt for a paper or hardware wallet.
Online Bitcoin wallet is a type of hot storage that does not require installation and operates completely online. They can be accessed from any device connected to the internet if a user has his PIN code. For this reason, they are convenient for everyday purchases or as transitional wallets. The downside is security which is poor because private keys are stored online.
GreenAddress is a hot wallet that offers multisignature accounts, as well as nLockTime Transactions. GreenAddress is also an HD wallet which means that, with every transaction, a new address is generated.
How to set up a wallet
Creating a wallet is pretty much self-explanatory – you only need to follow the instructions.
- Click on the link provided above
- Click the “LAUNCH APP” button
- In the next step, a pop-up window will appear, and you will be asked if you want to log into your old wallet or to create a new one
- Click Create a New Wallet
- You will be presented with 24-word secret recovery phrase. Make sure to write it down and store it somewhere safe.
- Confirm that your passphrase is saved and secured
- Click Continue
- You will be asked to fill in the missing words from your secret recovery phrase to prove you have saved it
- Click Verify
- The wallet will offer you to encrypt the mnemonic phrase, in which case you will be prompted to set up a password. Also, you will have to set up two-factor authentication and generate a PIN code that will allow you to access your wallet and send funds.
You can use your email, SMS, and Google Authenticator for 2FA. Once you enter your email address, for example, open the email and enter the code in your wallet.
After these steps, you’ll be introduced to the wallet interface.
In the Settings section you can choose the pricing source, enable or disable sound, change language, change PIN, link third-party account, set up notifications, change privacy settings or 2FA. You can also set up auto logout. If you forget your mnemonic phrase, this is the place where you can find it.
Here, you can also find nLockTimes section. If something happens to GreenAddress, you can redeem your funds after a predetermined number of blocks.
The final two segments are Spending limit and Remove account.
To receive Bitcoins, click the Receive funds section.
The receiving address will be displayed to you and you can copy it and send it to the person who wants to send you BTCs. They can also simply scan the QR code. You can also request a specific amount of Bitcoins.
To send funds via GreenAddress, go to Send section, and fill in the form. Make sure you have entered the correct address,so you do not lose your Bitcoins.
GreenAddress is an HD wallet which means that the address changes with every new transaction.
The wallet also uses 2FA and multisignature feature.
If you want to finalize a transaction, you will have to get authorization from a pre-determined number of co-signers.
nLockTime is what makes GreenAddress so unique. This feature allows you to redeem your Bitcoins if the service goes down.
Watch-only accounts are designed so you can check the balance without the need to access the entire wallet.
No matter how safe and secure you think an online wallet is, do not use it for storing a large number of Bitcoins. These wallets are convenient for everyday purchases. However, if you own a great amount of BTCs, consider using a hardware wallet. These devices operate completely offline, and your private keys are safe from hacker attack and malware, as opposed to online wallets.
GreenAddress can be accessed from any device connected to the internet. You can install the app on your Android or iOS phone. All you have to do is enter your credentials and you are good to go.
A transaction can be canceled only if you use multisignature account and the other co-signer does not approve the transaction.
To recover your GreenAddress wallet, you will have to enter your secret recovery phrase. Therefore, it is crucial to make several copies and safely store them in different locations.
SpectroCoin is a hot wallet that allows its users to buy, sell, receive, and send funds. The wallet is available for Android and iOS users. It can also be accessed via web browser.
How to set up a wallet
- In order to set up SpectroCoin wallet, you will have to go to the company’s website and create an account.
- On the homepage, you can find a sign-up button
- You will be asked to enter your email, password, accept terms and conditions, and confirm you are not a robot
- Then you enter the password and captcha code. A confirmation email will be sent to your address, and when you click on the provided link, you’ll be redirected to the login page. You can also complete the sign in process with your Facebook or Google account.
- To login, enter your email and password
- If you want to send or receive bitcoins, click on the Account/ Wallets
In the Account tab you can find several sections including:
- Balance and history
- Send bitcoins
- Receive bitcoins
- Fixed send
- Top-up’s and vouchers
- Debit card
Unfortunately, SpectroCoin does not offer two-factor authentication and multisignature feature. Anonymity is also ata very low level. Given the fact that this wallet operates online, security is definitely not one of the features the developers should be proud of. On the other hand, the website does use SSL encryption, and they claim that clients’ information is stored “somewhere in France.”
Similar to the previous example, SpectroCoin is also available to Android and iOS users.
Unfortunately, there is no way to cancel the transaction and the only way to get your funds back is to – contact the recipient.
If you’ve lost your password and cannot access the wallet, all you need to do is enter your email and click Recover password.
Many users claim that they have been banned for creating multiple cards. Allegedly the company did not warn them that this might happen and they lost their funds.
Some clients even claim that their accounts have been blocked for no particular reason.
Given the fact that security of SpectroCoin is not on a high level, we are more inclined to trust these allegations, than not.
Online or web wallets should be used for everyday purchases. For storing large amounts of Bitcoins consider getting a reliable hardware wallet.
When it comes to setting up a wallet, it is quite simple. These are mostly user-friendly wallets, and their interface is intuitive making them convenient for beginners.