Topic: Electrum Cold Storage (Read 2507 times)

Many thanks for this. I have read that Electron generates many addresses for receiving BTC. So, if the first one the offline wallet creates is the same as the first one the online wallet creates then all is well?

You are now smarter than the average Bitcoin user

Yes, keeping coins on Exchanges "long term" is a terrible idea. As the saying goes "If you don't control the private keys, you don't control the coins"... and I'm not aware of ANY exchanges that give the users control of the private keys for their accounts.

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They definitely should.

You are now smarter than the average Bitcoin user

Yes, keeping coins on Exchanges "long term" is a terrible idea. As the saying goes "If you don't control the private keys, you don't control the coins"... and I'm not aware of ANY exchanges that give the users control of the private keys for their accounts.

No, not Bitcoin/the blockchain itself being hacked. I mean the exchange. My BTC has just been left in my online account with the exchange, which apparently is unwise hence why I'm going to put my BTC offline in cold storage. I haven;t actually created any wallet at all, yet. I was given a wallet to download by the exchange but I think it's pretty much meaningless, and I certainly didn't know what to do with it or how it works.

You just want to send some coins tO your wallet? That's easy... In the watching-only wallet, simply click on the "Receive" tab... it will give you an address to send to. You copy/paste that address to the withdraw/send page on the Exchange. They will then send the coins to that address.

You can get the address from either the offline wallet or the watching-only wallet. If they are configured correctly, they will generate identical addresses. The watching only wallet is essentially a "clone" of the offline wallet WITHOUT the private keys. I'd recommend using the watching-only wallet for the day to day tasks like generating addresses, checking balances etc. The offline wallet should only really be used for signing transactions.


ps. You should double check that your offline wallet and your watching only wallet ARE actually generating identical addresses before you start sending coins to your wallet

I don't know how you got the idea of Bitcoin being hacked. It was never hacked. only the 3rd party sevices like exchanges got hacked and that's because of their own stupidity.

Just keep your private keys safe and you'll never have to worry.

Thanks. I think it's clear enough for now. I'll generate the address in the offline/cold wallet and use it in the exchange. I'll start by transferring a tiny quantity of BTC just in case, then go through the steps of swapping code around the two wallets in order to register the transaction, et cetera.

I have read a bit (no pun intended) on this and probably know enough - now - to use the system, although I haven't much of a clue as to the ins and outs (like most, I imagine) - I probably never will know. BTC is so complex and so vulnerable to theft/hackers that I really don't know how it became so large a phenomenon.

Before you dive into complex stuff (like making transactions from a cold/watch-only wallet), you need some reading to do on the basics. At least get yourself familier with the concept of public and private keys.

I will give you  head-start:
Every bitcoin address is a combination of public key and private key. You can generate this online or offine, doesn't matter. Both work same, however offline method is more secure.

To receive BTC, you just give the public address to someone (like an exchange). Never give private key to anyone.

It is not necessary to use different address for each transaction. Addresses can be re-used as much as you like, however some people like to keep changing addresses for privacy reasons.

I get the parts involving setting-up an offline cold wallet and an online watch-only wallet, but not where sending BTC (to that two-part wallet) is concerned.

What you wrote, and what is included in online instructions for the Electrum wallet setup process, makes no sense to me.

I want to transfer BTC from the exchange where they were purchased into the Electrum cold wallet.  What you describe is sending money from the watching wallet. But how is this possible as the wallet has just been created and contains zero BTC? I guess I need some sort of address to give the exchange so it knows where to send my BTC to. Do I give the exchange the public key (xpub?) or a specially generated address? If the latter (the address) should that address be generated in the offline wallet or the online wallet? Also, for the same wallet (the same account, in essence) should that address always be used or can a new one be created - does a new one need to be created - for every transaction? Can I advertise that address for anyone to pay me their BTC?

This is basic stuff but it isn't clear to me, so I would be very grateful if you could clarify it.

Thanks.

P. S. I read that the xpub key should never be revealed, but was this a mistake on the writer's part; did the writer actually mean the private key (xprv)?

So it's not going to take 1.7365884x10^26 years but rather only 1.7365884x10^19 years. In other words not 3000000000000000000000000 times the age of the earth, but rather only 300000000000000000 times!

Hey, i just remembered your calculations and was wondering about one thing.
Technically even if you can run through 3.1536x10^13 seeds per year, if you consider that there may be around 10 milion of electrum wallets set-up with different seed phrases it only makes it 3153600 seed phrases to go through to find at least one working wallet.

If you are only interested in cold storage for bitcoin you can save yourself the hassle and just get a Digital BitBox hardware wallet for $78 shipped. I just set a friend up with one and it is very nice, the co-founder of the company is a Bitcoin Core developer.

Bonus tip:

Electrum has one more useful feature. In future if you decide to spend some BTC from your cold wallet, you don't need to actually transfer that wallet to a "hot" PC (which is connected to internet).

You can actually keep your wallet offline, sign a transaction from that, take that transaction on a USB flash drive, and broadcast it from a "hot" PC.

This way, your wallet never touches a hot PC, so there's no risk of any wallets to be hacked or malware attacks.

Google for the exact procedure.

Thanks again, appreciate everything!

Yep, watch address works exactly like you said. Enjoy and welcome to the club!

Everything works exactly as you said, thank you very much. I did all the steps and am about to format the laptop for the second time to close the case.
I will be keeping the only-watch wallet on my online PC though, is that completely safe and work the same as checking up a transaction on blockchain?

I'm not much familiar with Electrum, but do you have addresses on the "Addresses" tab?

*Edit: Nvm. I was on the watch-only wallet.

Private keys are helpful if in future you want to use some other program to recover your coins. Not all programs accept the 12 word seed, but all programs will accept a private key (even online wallets like blockchain.info). So it is good practice to keep them with you.

It is very easy to export private keys from electrum, just go through the menus and you'll notice an option. If not, just google it.


EDIT: Something like this -

I am in the middle of doing all that. You also noted to export and print private keys, do i need to do that in case of Electrum?
They only require you to have the 12 word seed to backup your coins. I am new to this and i can see that there's no private keys after i created the wallet.

So i'm now a bit worried, should i do something with private keys or can i leave it like this and just save the 12 word seed and not worry about anything?

I created a cold storage for a friend of mine. It was with Multibit Classic, but the process remains same for Electrum.

- Disconnect from Internet
- Format laptop to install clean Windows
- Install Multibit (or Electrum)
- Copy the 12 word seed to notepad & print to PDF as well as paper. Also save/print the QR code. *
- Export private keys to notepad and print to PDF as well as paper. *
- Print the list of public addresses so that you can send funds to them *
- Copy files (PDF, notepad, QR Code etc.) to a USB drive, then remove the USB drive *
- Format the laptop again, install clean Windows
- Keep paper wallet & USB drive in safe place

(* You can create multiple copies of prints / USB drives if you want to store them at multiple locations)