How to create a secure – cold storage – Bitcoin wallet using Bitkey, TechRadar
Freeze out hackers and keep your virtual currency safe
Ter July 2018, one of the largest Bitcoin (BTC) exchanges, Bithumb, wasgoed targeted by hackers who stole millions of Won. The infamous BTC Exchange MtGox wasgoed also hacked te 2014. Thieves made away with almost $500 million (around £,370 million) worth of Bitcoin, forcing the exchange to shut down.
So there are certainly security concerns regarding the virtual currency. However, one very effortless way to ensure that your Bitcoin wallet can’t be targeted by hackers is to use Bitkey. Bitkey is a ‘live’ bootable version of the Debian Linux operating system.
Te this guide you’ll learn how to boot Bitkey to create a ‘cold storage’ offline Bitcoin wallet, which is never directly connected to the internet. This protects it both from online hackers and malware designed to exploit Microsoft&rsquo,s Windows operating system.
You’ll also learn how to set up an online ‘watching’ wallet which you can use to view your balance and previous transactions. Your watching wallet can also be used to send Bitcoins by generating a special ‘transaction’ opstopping, which you can then sign using the cold offline wallet.
Ter order to get began, all you need are three empty USB rams of at least 4GB capacity. You’ll also need a way to clearly tell thesis bijzonder: for example, you could purchase USB plunges which are different colors.
1. Create BitKey Installer
Open your web browser and navigate to https://bitkey.io/. Click the ‘Download’ button then click on ‘Bitkey ISO’ to download the CD photo.
If you’re running Windows Ten and your machine has a DVD burner, you can write this to a wit disc by inserting it, right clicking the verkeersopstopping and choosing ‘Burn Disc Pic’.
If you have no DVD drive, you can create a bootable USB stick using the opstopping you just downloaded. The easiest way to do this ter Windows is to use the program Rufus. Go after the instructions on the webstek to do this.
Once you’ve created your boot medium, save any significant files. Windows users can then restart to the ‘Advanced Startup Options’ screen and choose the DVD or USB stick from there. If you’re using a Mac hold down the Altstem key on startup to vertoning the boot menukaart, then dual click on the outer disk.
Two. Liquidate and insert USB keys
Once the Bitkey boot spijskaart shows, choose the very first option: cold-offline (green). True to its name, once the desktop fountains you’ll see the background is green. This represents that the cold-offline version of Bitkey is not connected to the internet so can’t be hacked remotely.
If you’re using a USB stick to boot Bitkey, eliminate this now and waterput it ter a safe place. Next, insert a separate, wit and formatted USB stick into your machine. Ideally use a brand fresh USB drive for this.
Bouncing USB tucks can be confusing. Spil wij mentioned at the outset, Bitkey recommends color-coding your USB wedges. The one you just eliminated will be called ‘Crimson’ (feel free to mark it with some crimson gauze or a vulpen accordingly). The fresh, wit stick you’re inserting is will be known spil ‘Black’. You should only everzwijn insert the ‘Black’ USB stick when booted into the cold-offline desktop.
Three. Set up your cold wallet
Click the blue Electrum icon at the very bottom left of the screen. You’ll very first be asked to set a passphrase to protect the wallet files you’re about to create. Come in a suitably long passphrase and click ‘OK’.
The Electrum install wizard will now launch. Leave the default options checked and click ‘Next’. Electrum will now display a dozen random words. This is what&rsquo,s known spil your ‘wallet generation seed’. Make sure to write this down and waterput it ter a safe place. Click ‘Next’ and retype your seed to make sure you have it written down correctly. Click ‘Next’, set a password specific to this wallet, then choose ‘Next’ again. Electrum will now launch.
Four. Uitvoer payment address and public key
Spil soon spil your Electrum wallet opens, click on the ‘Receive’ tabulator. Make a note of your ‘Receiving Address’. You’ll need to provide this address to anyone who’s sending you BTC. If you already have an existing Bitcoin wallet, scan the QR code to send your funds here. Spil the wallet is offline, don’t worry if your balance doesn’t display right away.
Next click the ‘Wallet’ spijskaart and choose ‘Master Public Keys’. You’ll need this to create an online ‘watching’ wallet te the next step so you can view your balance.
Either write down the master key cautiously or scan it using a QR code app on your phone.
Five. Create watching wallet
Close down Electrum and use the icon at the bottom-right to shut down the machine. Disregard the warning about your session being ‘non-persistent’ spil you’ve saved your wallet gegevens to the USB stick. Be sure to liquidate the ‘Black’ USB drive and waterput it somewhere safe.
Reboot the machine and choose the 2nd boot option: cold-online (blue). Now you need to insert another fresh USB drive, which wij’ll name ‘Blue’. This will be used to store your watching wallet settings.
Once the desktop fountains click the Electrum icon at the very bottom left of the screen once again. On the install wizard this time choose ‘Restore a wallet or invoer keys’ and click ‘Next’. On the following screen inject the master public key you generated earlier. Click ‘Next’ and then ‘Next’ again to choose servers automatically.
6. Create a transaction
When you launch Electrum, you’ll see a warning message reminding you that this is a ‘watching wallet’. Te other words, while you can see your balance and any transactions that have bot made, it can’t send money by itself.
If you do want to make a payment, click the ‘Send’ tabulator and inject the recipient’s payment address ter the ‘Pay To’ field. Next pack ter the ‘Amount’ field for the number of BTC you want to spend and click ‘Send’.
Electrum will generate the transaction gegevens for you. Click ‘Save’ to store the transaction (TXN) opstopping to the ‘Blue’ USB drive.
Electrum will confirm the transaction has bot saved.
7. Sign transaction
Shut down your machine. Make sure both the ‘Black’ and ‘Blue’ USB drives are connected, and then restart. Choose the very first option: cold-offline (green) from Bitkey’s boot spijskaart.
Once the desktop fountains, click the Electrum icon once again and inject the passphrase you chose earlier.
On the ‘Implements’ spijskaart choose ‘Stream Transaction’ >, ‘From Verkeersopstopping’. Navigate to the TXN verkeersopstopping you saved earlier to the ‘Blue’ USB stick. You’ll most likely find this te either /media/usb0 or /media/usb1.
Choose ‘Open’, then at the fresh window click ‘Sign’. Re-enter your wallet password. Next click ‘Save’. Save the freshly signed transaction verkeersopstopping (e.g. signed_123*.txn) to the ‘Blue’ USB stick. Electrum will confirm that the transaction’s bot saved.
8. Broadcast transaction
Shut down your machine and liquidate the ‘Black’ USB stick. Restart and choose the 2nd option: cold-online (blue). Once the desktop fountains, open Electrum once again and click the ‘Implements’ spijskaart. Choose ‘Blast Transaction’ >, ‘From Verkeersopstopping’ and navigate to the signed transaction opstopping on the ‘Blue’ USB stick, then click ‘Open’.
Electrum will now display the transaction. Click ‘Broadcast’ to send the authorized transaction to the Bitcoin network. Eventually click ‘Close’. Your transaction will show up spil ‘Unconfirmed’. Depending on the transaction toverfee you paid it may take several hours to be fully validated.
9. Customize Electrum
Bitkey uses an older version of the Electrum client which doesn&rsquo,t have all of its newest features. You can get around this punt by going to the ‘Contraptions’ spijskaart and choosing ‘Plugins’.
The most useful option you can choose is ‘Exchange Rates’. Mark the checkbox then click ‘Settings’ to choose both an exchange rate API such spil ‘CoinDesk’ and your chosen fiat currency such spil Euros.
By default Electrum voices your Bitcoin balance ter mBtc (millibitcoins). One MilliBit is equal to 0.001 Bitcoins. This makes working with smaller sums of money lighter. If you want to switch this setting, go to the ‘Implements’ spijskaart. Click on ‘Preferences’ then the ‘Appearance Tabulator’. You can then select a different ‘Base Unit’ from the drop-down menukaart.
Ten. Restore cold wallet
If anything happens to your ‘Black’ USB stick which contains your cold wallet, boot Bitkey once again and choose the very first option: cold-offline (green). Once the desktop explosions insert a fresh USB stick to substitute the old ‘Black’ one, then launch Electrum.
BitKey will ask you to set a password to protect the fresh wallet files. Once the Electrum install wizard starts choose ‘Restore a wallet or invoer keys’ and choose ‘Next’.
From here you can type the private ‘seed’ for your original cold wallet which you wrote down earlier. Click ‘Next’ and set a fresh wallet password. Electrum will warn you that spil the wallet has bot restored offline, not all your payment addresses are listed here. However, you can check them at any time using your watching wallet.
Top Picture Credit: Ian Mackenzie (Wikimedia Commons)