How to create a new Bitcoin-BTS wallet with withdrawal - a crypto wallet in which you can store the key without using an Internet connection. Creating a Bitcoin wallet is a reliable and secure form of storage for large amounts for a long time.
If money is transferred from a cold wallet via the Internet, then it “lights up” and becomes “hot”.
Advantages and disadvantages of cold wallet:
| Advantages | Flaws |
| Reliable, money is stored offline. | The usage rate is significantly lower than hot wallets. |
| Large selection of programs and hardware devices for secure storage. | Less convenient to use. |
| Desktop wallets make transactions difficult. |
Types of Bitcoin cold wallets
- Desktop (software) - in the form of programs installed on a computer. They come in two types - “heavy” and “light”. In the first (for example, Bitcoin Core), the entire blockchain chain is downloaded (for the entire period of Bitcoin’s existence). In “light” wallets (Electrum, Exodus), downloading the entire blockchain is not required.
- Mobile – you can conduct transactions on your smartphone. Example: Coinomi - supports cold storage of cryptocurrency.
- Hardware - small devices with a small display. Examples: Ledger Nano S, Trezor ONE White, KeepKey.
- “Paper” - a printout sheet with a private key and address. Money is stored offline, so it is the most secure.
Which ones support
Electrum
An easy-to-use wallet with all the benefits of bulky Bitcoin Core and thin wallets, recommended by bitcoin.org.
It has all the capabilities of a full-fledged client, consuming a minimum of disk space.
For use as offline storage, export and import of signed transactions has been implemented.
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You will find all the important information about the Electrum Bitcoin wallet in a separate material.
Bitcoin Core
The oldest and most popular wallet , the prototype of which was developed by Satoshi Nakamoto himself.
This is a “heavy” wallet, i.e. for it to work, you will need to completely load the entire BTC blockchain (then you can reduce the amount of disk space by turning on the “light” mode).
The program is easy to set up and very secure as it is an official open source client from the Bitcoin Foundation.
Provides cold storage via .dat files or downloading keys via the console.
Read about the Bitcoin Core wallet here.
Trezor
One of the examples of hardware wallets for the most reliable storage of cryptocurrency. It looks like a regular flash drive and connects to a PC via USB .
The private key is recorded in a special crypto chip, so it is physically impossible to access it, and the device itself issues already signed transactions to the computer.
This allows you to safely carry out operations even on a computer infected with viruses.
Paper
It may seem strange at first, but bitcoins can also be stored on regular paper. But not the coins themselves, but the same keys.
They are printed as QR codes and must be scanned to make a payment. A similar wallet can be created at www.bitaddress.org.
How to open a Bitcoin cold wallet
Where and how to register a Bitcoin wallet?
Using Bitcoin Core as an example, we’ll tell you how to create a Bitcoin address:
- On the website https://bitcoin.org/en/download, select the operating system and download the installation file.
- After downloading the program, click install, then in the window that appears, click Next. The software installation will begin.
- The program will prompt you to select a destination folder for downloading a blockchain larger than 120 GB. Check that there is enough space on your hard drive. To continue installing the client, click Next.
- After downloading the program, check the box next to Run Bitcoin core and click finish to run.
A window will open to connect to the network. The program will prompt you to allow access to the Internet, and then the download of blocks will begin, which may take several days (depending on the connection speed).
Encrypt Bitcoin Wallet after installation. To do this, click Settings in the top menu and select Encrypt wallet. The program will prompt you to enter a password of ten or more random characters.
Save your passphrase; if you forget or lose it, you will not be able to access the funds.
KEEPKEY
- Supports Bitcoin, Litecoin, Dogecoin, Namecoin, Testnet, Ethereum, and Dash.
- The main feature is a 3.12″ OLED display with a resolution of 256×64.
- STM32F205RGT6 is used internally.
- This is the only hardware wallet we are considering that allows you to use your own firmware. For security reasons, when using third-party firmware, the device displays a warning when turned on.
- Complies with FIPS PUB 140-2 and FIPS PUB 180-2.
- Just like Trezor, it comes in a special package that cannot be opened unnoticed.
The PIN code entry mechanism is the same as in Trezor, so there will not be a separate video.
Issue price: $129.00
. More than its competitors, but the screen is really good.
Sending Bitcoins to a wallet
Before making the first deposit of coins to your Bitcoin wallet, wait until the client is completely downloaded and synchronized. Then, in the top menu, click Receive, then Request payment. The Bitcoin address and QR code will appear.
This address should be used to transfer Bitcoins. When translating for the first time, test the program. Try withdrawing a small amount of coins from another wallet to Bitcoin Core.
There are two ways to store coins offline: export your private keys or use a client .dat file.
In the second case, the algorithm of actions is as follows:
- Disconnect your computer from the Internet.
- Launch Bitcoin Core. The information in the client will be displayed as follows: 0 blocks, 0 connections.
- Click Settings - Change passphrase to change the program passphrase. Enter the old phrase, then the new one twice.
- Now you need to transfer the .dat file to a USB drive. It is located in the folder you selected to download the wallet. Save the Bitcoin address there in a .text file.
- Turn off the PC and all power sources for 1-2 minutes. If you are using a laptop, remove the battery.
- Back up the .dat file and save it in several places.
- Transfer the “trial” amount of coins to the Bitcoin address that is saved on the USB drive. To make sure that the coins were sent and arrived where they were supposed to, open the block explorer.
Ledger Nano S
- Supports Ark, Bitcoin, Bitcoin Cash, Dash, Dogecoin, Ethereum, Ethereum Classic, Komodo, Litecoin, PoSW, Ripple, Stratis, Zcash, and all ERC20 tokens.
- Supports U2F, GPG and SSH.
- Uses 2 microcontrollers internally: ST31H320 (protected) + STM32F042.
I will also attach a video here demonstrating how to enter the PIN code. In my opinion, not the most convenient way. It is especially difficult to enter words in this way to restore a backup copy of your wallet. The issue price is 58.00 €
The main drawback is the manufacturing quality of the device itself. The left button sometimes perceives a single press as a double press.
Cold Bitcoin wallets: examples
- Electrum : https://electrum.org/#home.
This is a lightweight desktop Bitcoin wallet for Linux, Windows, Mac. Electrum can work with some physical wallets and is more flexible than a simple hardware wallet like Trezor. The application supports the recovery process in case the computer is damaged.
- Exodus : https://www.exodus.io/.
This is a software wallet for PC only. Exodus turns Bitcoins into a portfolio with graphs and charts. The ShapeShift service has been imported into the storage, thanks to which you can exchange coins inside the wallet. There is private key encryption and other useful security tools. Convenient for investors and traders.
- Bitcoin Core : https://bitcoin.org/ru/download.
Free software that works offline. Bitcoin Core is compatible with Tor, a browser that hides IP addresses. When sending Bitcoins, transactions must be recorded on a public blockchain. The wallet transmits information through a large peer-to-peer network, making it much more difficult to track. The program uses a graphical user interface or a set of command line tools to access and navigate your wallet. This is the most secure free crypto wallet, but it is difficult for beginners to use.
Trezor
The device was introduced in 2014.
So, what can Trezor offer us:
- Currently supports Bitcoin, Ethereum (+ all ERC-20 tokens), Ethereum Classic, ZCash, Litecoin, Namecoin, Dogecoin, Dash and Bitcoin Testnet.
- During the production of the device, after it is packaged, the box in which it is placed is sealed with holographic security tape. Its presence confirms that the device is original. It also partially protects you from opening and substitution or modification of the device during its delivery.
- It also offers a Password Manager for the browser (no master passwords - each password is encrypted with its own key, to log in you just need to press a button on the device, if you lose your device, your passwords are not lost, it works through the mechanism of browser extensions).
- Supports U2F (Universal Second Factor).
- SSH/GPG agent.
- Supported by a large list of software wallets and online services (the full list can be found here - https://doc.satoshilabs.com/trezor-apps/index.html).
- Every time you connect your device to your computer or mobile device, you are required to enter a PIN. After this, the device goes into an unlocked state and will allow you to carry out operations. Once disconnected, the device returns to a locked state.
The PIN code entry mechanism itself is quite original. In order not to describe it, I’ll just give you a video: What’s nice is that the manufacturer gives you very reasonable recommendations on how to safely store this passphrase.
Issue price: $99
The main disadvantage is that it supports fewer cryptocurrencies than ledger.
How to use Bitcoin wallet?
Creating a Bitcoin wallet is generally quite simple. Bitcoin wallets are created for free.
Cold crypto wallets are rarely used on a daily basis, they are mainly used with a hot wallet as a “safe” for large amounts. That is, to transfer money to the main wallet and then pay from it. Cold storage protection is added to hot storage speed and the result is excellent.
For “cold storage” it is good to allocate a separate computer without a network connection. Then it will be possible to create a transaction on the main computer in a hot wallet, transfer it to an offline machine, sign it with a private key and return it back to send it to the network.
If you use one PC for all operations, then the private key must be stored separately and the encryption password must be changed after each use. You can also watch a video of creating a Bitcoin wallet.
What is it, its advantages and disadvantages
First you need to understand what a private and public key is and how transactions are carried out on the blockchain.
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Keys are certain numbers, very large so that they are almost impossible to guess.
You can transfer the public key to anyone, and based on it, a Bitcoin wallet address is generated. Only you have access to the private key, and the safety of your bitcoins depends on it.
When a transaction is made, it is signed with a private key, which confirms that these coins belong to you.
The entire security of your savings depends on the private key . If someone steals this key, they will take over your funds.
Cold wallets were created to prevent attackers from gaining access to the private key.
In hot storage, the private key is stored either on the online wallet servers or on your computer, which is also connected to the Internet.
Connecting to the network makes it possible for a hacker attack from the outside, so hot wallets cannot be called 100% safe.
In a cold wallet, the private key is stored on an offline machine , transactions are signed on it, and only then transmitted from an online computer to the blockchain network, so it is impossible to obtain a private key and your bitcoins.
The main advantage of such a wallet is reliable cryptocurrency protection , and in cases of large amounts this more than compensates for its shortcomings:
- Lower speed of transactions.
- More actions and less convenience.
- High price (if we are talking about a hardware wallet).
In order for you to know how to properly use a wallet for storing cryptocurrency, we have posted articles on our website that will tell you about:
- how to create a wallet;
- what are the methods of replenishment, including through YuMoney and Qiwi wallets;
- how to choose the best one or find out the address and number of a crypto wallet;
- how to top up from a bank card;
- What are Bitcoin faucets?
Cold storage in Bitcoin Core
This storage method will require approximately 160 GB of disk space and this size will increase. It is most vulnerable to interception and hacking attacks on an infected PC. Therefore, it is worth using a separate computer or virtual machine.
The installation takes a lot of time, the main thing is to download the file with the entire history in blocks. Synchronization can take from several hours to a whole day.
There is an input control function. You can also encrypt data and set a password to enter the wallet.
Breaking
It is impossible not to mention the story of hacking hardware wallets.
Josh Datko and Chris Quartier gave a presentation at DEF CON where they shared their tools and techniques for hacking some cryptocurrency hardware wallets. These techniques were demonstrated to be applied to the STM32F205 microcontroller, which was used in devices from Trezor and Keepkey.
The presentation was based on research done by Jochen Hoenicke in 2015, in which the private key in a Trezor device was compromised using a $70 oscilloscope. The vulnerability has been patched by the manufacturer. This, however, does not exclude the possibility of new similar attacks both on these devices and on devices from other manufacturers.
How to protect a cold wallet
- Do not tell anyone how much cryptocurrency you have, where it is stored and in what way.
- Use fragmented passwords and multi-signatures.
- Make several copies of private keys, encrypt them and store them in safe places: in the cloud, on a flash drive, in the form of records. The risk of losing coins if you lose your private key will be lower.
- Do not store cryptocurrency in one place. Most of it should be stored in cold wallets, and small amounts are conveniently stored in hot wallets, then they can be accessed in a few minutes.
- Create a complex password, enable 2FA authentication, SMS notifications, etc.
Do not click on unknown links received from strangers from a computer on which cryptocurrency is stored.
BITLOX
If previous wallets were more like classic tokens or TrustScreen-class devices, then this one imitates smart cards.
- Supports Bitcoin and, more recently, Ethereum.
- Contains a battery inside that is charged via Micro USB.
- Interacts via Bluetooth LE.
- Only 4 mm thick.
- Display eink - 2″.
- Supports several PIN codes: for connecting a device, for working with wallets, for conducting a transaction.
- The random number sensor has been certified by NIST.
- It also has a special PIN, entering which will completely wipe the device.
- Has services for working via TOR (BITLOX2twvzwbzpk.onion) or I2P (BITLOX.i2p).
A distinctive feature of this hardware wallet is its eye-catching website.
And also a clear positioning not so much on the protection of funds, but on privacy and use on the Darknet. Issue price: $98.00
.
Installation
Two flash drives are required for installation. First you need to format the devices in the FAT32 system. Then you need to download the image of the Tails operating system.
For mounting, you can use Universal USB Installer. To mount, just select the image and Tails operating system. Once completed, you will see a message like this.
Next, you need to boot from this flash drive and start the system. After this, you need to insert the formatted flash drive and install the system there, where it will be stored on a long-term basis. To do this we go:
- Applications->Tails->Tails Installer
Next you need to select our flash drive and start the installation. The process is not quite complicated. After installation, you need to reboot from a new bootable USB flash drive.
