Storing

Safe keeping your bitcoin and other cryptocurrencies

Assuming you didn’t choose to invest some via your UK pension. I suggest three ways, each way is explained further down the page:

  • The Ledger Nano S – this supports many crypto currencies and supports FIDO the new standard in web site security
  • Take a fresh PC, either a PC which has just been completely erased and had Windows 10 reinstalled on it or better still build a Ubuntu Linux and install the https://electrum.org/ wallet and move your bitcoins from the purchase exchange to a bitcoin address when you have run the software for the first time
      • This means that your bitcoin wallet can be restored by a 12 word passphrase, the Ledger Nano S generates a 24 word passphrase in the same way, so your coins can be restored to another Nano if you stand on it or forget the basic protection password or indeed can even restore it to the Electrum as stated above
      • This is a convenient way for experienced users only
  • Move your bitcoins from the exchange like bitstamp.net to a bitcoin address generated by https://www.bitaddress.org/ see below. This is a very secure way for perhaps experienced users only or computer literate folks who are happy to read carefully, practice and test as go along

Method 1
The Ledger Nano S guide below by “Boxmining”, a popular youtube commentator

  • High cost
  • Customer only need to follow the instructions
  • It will also handle new cryptos through updates to the firmware
  • Robust solution
  • Proven, on market for long time
  • Bonus, comes with FIDO U2F, Universal 2nd Factor system for logging into web sites securely

The Ledger Nano S supports the new FIDO U2F authentication system for logging into web sites more securely. This is being pioneered by Google, Microsoft, Dropbox, Github, PayPal, FaceBook, SamsungPay etc. You’ll start seeing it as Universal 2nd Factor (U2F). On their own they cost £10 to £40 depending on the sophistication you’re after. We will probably start getting cheap and nasty ones from the banks but then that means we’ll be collecting the things, which is what is supposed to prevent… You should be able to use a single FIDO U2F security device on all enabled web sites.

Method 2
The Electrum way

  • Low cost
  • Harder to use, really required cryptocurrency buddy to assist and explain
  • Can be used in off-line mode which makes it as secure as the Ledger Nano but harder to learn this method
  • Can create multi-signature wallets where all the machines involved can be exposed on-line without security risks

Step 1

Install Linux Mint 64bit on an old laptop – keep it just for cryptocurrencies – NOTHING ELSE

This is a great instructional video similar to mine but I have explain BIOS access better with allows you to install Linux on windows lap. Most people get stuck at that point.

These are my instructions to install Linux in preparation for use with my Swiss Army Knife script:

Step 2

Install electrum the easy way with my script:

https://github.com/markcross/universal-crypto-wallet-system

Step 3

Run electrum from your menu and create a Standard wallet -> Create a new seed -> “Standard”

This is what a standard bitcoin address looks like (it starts with a 1)

1HPEXnqdKAtzMFYzayr78HEc9XJysY2hHt

Step 4

  • During this process it made you write down a 12 word pass phrase – three times
    • Keep one copy somewhere in the house, one at a relatives and one somewhere else
  • Click on the “Receive” tab and copy with the blue clipboard button the bitcoin address and the address might look like this: 
    • 1HPEXnqdKAtzMFYzayr78HEc9XJysY2hHt
  • Log into bitstamp.net and go to the “Withdrawal” section add the public address 
    • 1HPEXnqdKAtzMFYzayr78HEc9XJysY2hHt
  • If you are the cautious type just move £150 worth of bitcoin to your paper wallet address, this will probably cost £5 or so but better safe than sorry.
  • Click on the “Withdrawal” button
  • Go to https://blockchain.info/ and enter the public address of your paper wallet IE 
    1HPEXnqdKAtzMFYzayr78HEc9XJysY2hHt
  • Refresh the page after every ten minutes or so. Or you can just watch the Electrum’s nodes scanning the bitcoin blockchain wait you transaction to appear on the next work
  • Eventually you will see that the bitcoin “Withdrawal” from bitstamp to your paper wallet address has been confirmed by the bitcoin network
  • Viola you have sussed it
  • Repeat with remaining amount of bitcoin left on bitstamp.net
  • For most exchanges when it’s been confirm twice the deal is and done and non-reversible

Method 3
Bitcoin stored on a paper

  • Low cost
  • Harder to use, it’ll right off a Sunday afternoon
  • If a small quantity of bitcoin is sent to the paper wallet address as a test, very secure for novice

Step 1

  • Go to this site https://www.bitaddress.org/ – let the page load but do nothing else
  • In FireFox go to File -> Save Page As – “bitaddress.org.html”
    • If you cannot see the File menu in FireFox press and hole the “Alt” key next to the left of the space bar
  • Disconnect your PC from the internet

Step 2

  • In FireFox go to File ->Open File – “bitaddress.org.html”
    • which you probably saved on your Desktop
    • or in Downloads folder
  • Generate a bitcoin address and generate a paper wallet by moving the mouse around on your disconnected PC

Step 3

  • Print this out 3 times
    • Keep one copy somewhere in the house, one at a relatives and one somewhere else
  • Copy only the public addresses of the wallet into notepad or Word
  • Close the browser that was open for the bitaddress.org web site on your PC you used to generate the wallet
  • Reconnect your PC

Step 4

  • Log into bitstamp.net and go to the “Withdrawal” section add the public address
  • If you are the cautious type just move £50 worth of bitcoin to your paper wallet address, this will probably cost £5 or so but better safe than sorry.
  • Click on the “Withdrawal” button
  • Go to https://blockchain.info/ and enter the public address of your paper wallet IE 1HPEXnqdKAtzMFYzayr78HEc9XJysY2hHt
  • Refresh the page after every ten minutes or so
  • Eventually you will see that the bitcoin “Withdrawal” from bitstamp to your paper wallet address has been confirmed by the bitcoin network
  • Viola you have sussed it
  • Repeat with remaining amount of bitcoin left on bitstamp.net

How do get the bitcoins back from the paper wallet?

You can either install Electrum from https://electrum.org/ and once installed you will generate a 12 word passphrase which will generate a new wallet following the instructions above or just on a general PC.

The problem with a general PC is that you don’t know if it has been infected by a virus or keyboard logger etc. Hence method 2 – The Electrum way on a dedicated old laptop running Linux.

  • Sweeping your paper wallet bitcoin into Electrum will cost a bitcoin transaction fee
  • Type the “secret key” from your paper wallet generation which you performed when you PC was not connected to the Internet or go to https://webqr.com/ and use your webcam to scan the “secret key” from your paper wallet
  • And “paste” the private key into Electrum

Go to “Wallet”->”Private Keys”->”Sweep” IE
KxnfCZjU725KHEdxnKiVdLEnfmkZS5H4ugDJ7rR55P9J3gRBYjoF

Another way to sweep you paper wallet private key use blockchain.info

First of all watch this video in which she really explains the process very well, this method is cheaper, quicker and you must remember that this is an on-line wallet that is not yours and like an exchange can just disappear of the face of the earth. Although being established in 2011 has raised over £50M in venture capital. But this does not prevent hacking attacks.

  1. Create an account with blockchain.info
  2. Go to Settings->Addresses-> “+Import Bitcoin Address”
  3. Click on the QR code and you can use your laptop webcam to scan the private key QR code from the paper wallet


Now you transfer your bitcoin back to an exchange, remember it is no longer is under your control, it’s as though you have put it in a bank. Do not leave large amounts of value on blockchain.info.

For anything more than several hundred pounds you should be using either Electrum on a dedicated Linux PC / have an off-line setup or be using a Ledger Nano.

https://blog.moneysavingexpert.com/2017/11/30/invest-bitcoin-four-things-need-know/

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