Understanding Bitcoin: Downloading A Wallet
- August 8, 2018
- Posted by: CryptoCoach
- Category: Charities, Corporates
If you’ve become interested in Bitcoin and digital currencies, then you will have no doubt explored it conceptually by reading one of the multitudes of guides that seeks to explain it. You may have even read my earlier post: “Understanding Bitcoin – Getting Started”.
You can certainly spend a lot of time musing about Bitcoin and blockchain to try and get your head around this new technology but if you’re serious about increasing your knowledge then in my opinion, by far the best way is to try using it!
To do that, the first thing you’re going to need to do is download what is known as a Bitcoin wallet. A bitcoin wallet is a piece of software that allows you to connect to the Bitcoin network and start sending and receiving transactions. Your wallet software will enable you to generate both public addresses for receiving Bitcoin and the private keys associated with them to then allow you to spend it.
As practically everyone has easy access to a smart phone it makes sense in this post to pick a mobile wallet that works across both iOS and Android to allow as many readers as possible to follow along.
The wallet I am going to recommend you try is the Copay wallet. I like its interface and think it’s accessible for beginners whilst having some really important and useful features.
It is important to point out here that there are lots of choices when it comes to wallet software. Each one is slightly different. You can have desktop wallets that work on Windows, Mac or Linux and mobile wallets with some working on Android, others iOS or Windows, and some on multiple platforms. So here are the reasons I chose Copay for this short guide:
- Most readers will have access to a smartphone and Copay supports both iOS and Android (Sorry to the 4% of Windows phone users).
- Copay is a ‘True’ Bitcoin wallet in that it is not a custodial service. No central party is keeping a copy of your wallet or storing anything for you. Everything is stored by you on your device. This is better security.
- Copay supports multiple wallets. You can create as many as you like, you effectively enjoy all the trappings of being your own international bank.
- It’s Open Source – this means the code is open to review by anyone who decides to look. This increases our faith that this code is bug free and not compromised in anyway. After all – we want to use it to control our Bitcoin.
- A neat little feature in this wallet is the ability to create ‘Shared Accounts’. This is something that isn’t easily done in the traditional banking world so it’s fun to show you what’s possible.
There are of course alternatives to choose from. I’m not affiliated with Copay in any way, I just like their wallet. If you want to look at other reputable wallets check out the wallet guide on bitcoin.org https://bitcoin.org/en/choose-your-wallet (this is a trusted resource, it was actually a website first registered by Satoshi Nakamoto!)
Ok, so now that we have chosen a wallet let’s go through the steps to get you up and running!
Step One – Initial Setup
One of the first things the Copay app will ask you to do is to password protect your wallet app:
This is highly advisable. If someone gets hold of your phone and it’s unlocked they could open up your Copay
wallet app and without any password protection could begin making transactions and take your Bitcoin! Applying a password to the wallet means that even if your device is compromised you have some level of protection.
Notifications By Email
You will also be asked during setup if you’d like to setup email notifications.
Personally, I would. You don’t have to sign up to any marketing emails if you don’t check this box, but it means that whenever you make or receive transactions you are notified about it. This gives you extra piece of mind that should your Bitcoin start moving without your permission you will be notified about it. It’s also handy as a way to keep track of all your transactions.
Back-Up Your Wallet!
Now this part of setting up your wallet is extremely important. We mentioned before that the Copay wallet is a true Bitcoin wallet, meaning that Copay do not store a back up of your wallet or private keys. This is a good thing as it means that Copay is not a target for hackers who want to unlock the funds of every Copay user by accessing their internal systems and it means your Bitcoin is much more secure. It does however mean you need to take on more personal responsibility. If you lose access to your wallet, there is nothing they can do to help.
Luckily you can ‘back-up’ your wallet yourself. Copay is an HD or ‘Hierarchical Deterministic’ wallet. This means that your keys are generated from a single starting point or ‘seed’. If you take a note of this ‘seed’ then regardless of whether you lose or destroy your device, you will always be able to reproduce your keys and gain access to your funds on a wallet on another device.
So, you’ll definitely want to be backing up your wallet!
If you follow the steps for backing up your wallet in Copay you will be presented with your ‘seed’. It will look like this:
Now you should absolutely make sure to note this seed down. My advice would be to write it on a piece of paper rather than store it on a file in your computer or any other internet connected device that could be compromised. Make sure to write the seed words down in the correct order and keep this somewhere secure. If you ever lose your phone, just install copay on another device and you can restore your wallet using the seed. Crisis averted!
Great, you have now successfully backed up your wallet!
Step Two – Learn How to Receive Transactions
Now that you’re up an running you’ll find everything becomes really straightforward. Want to share your Bitcoin address with someone so they can send you a payment? All you have to do is share you’re a Bitcoin receiving address with them. No different really than giving someone the sort-code and account number of your bank.
In the Copay app, click the ‘Receive’ tab and you will be presented with this screen:
You will see on this screen a QR code and a long, complicated looking string of numbers. This is your Bitcoin address. To be clear, the string of letters and QR code are exactly the same, just shown in different formats.
To share your Bitcoin address with someone who wants to transact with you then there are a few ways you might do this.
- Double tap the string of characters to save them to your clipboard. You can now paste them into an email, text them or send them via a messaging app.
- Screenshot your QR code and send the image to allow another user to scan it with their wallet app.
- In person someone may use the scanner in their wallet app so simply scan your QR code from your device’s screen and get your address.
Step Three – Sending Transactions
Sending transactions is also straightforward. You just need to scan someone’s address using the scan tab or you can copy and paste a receiving address into the app on the screen below:
Once you enter the receiving address you can then initiate a transaction provided you have enough available, confirmed funds:
Important Note: Notice that I stated you needed sufficient ‘confirmed’ funds to initiate a transfer. You may have received a recent Bitcoin transaction that shows in your wallet balance but has not yet been confirmed by the network. Unless you start changing advanced settings in the app it will wait until these funds are verified and confirmed before allowing you to fund a transaction with them.
One thing I particularly like about Copay is the ability to use a special function of Bitcoin. This special function is known as ‘multi-sig’ and you can create a ‘multi-sig wallet’ in Copay. It sounds complicated but all it means in simple terms is that you can create a shared wallet that has multiple signatories attached to it.
This means you can do interesting things like share a wallet with a business partner or spouse and funds can only be moved from the wallet so long as a required number of signatories sign off on it. Sounds a lot slicker than most corporate sign-off processes, right?
You might not have an immediate use for this feature, but I would recommend playing with it. It’s your first insight into how programmable digital money can be far more flexible and useful than traditional currencies.
A lot of people will opine about how difficult Bitcoin is to use and that this means it can never be adopted. One commonality I have discovered about the people who hold this view is that often than not, they have never even tried to use it. If you have gotten this far you may be starting to realise that Bitcoin is becoming more usable at a steadily increasing pace, and it’s only set to continue.
Now if you have followed this guide and installed a wallet then well done, you’re on your way to discovering that these technologies are actually pretty accessible. Chances are that now you have installed a wallet you are interested in learning how you might acquire some Bitcoin to fund it with.
Stay posted as I’m working on a follow-up post that will give you a decent guide into all the different ways you can earn, buy and even mine some Bitcoin to put in your shiny new wallet. Want to make sure you don’t miss it? Then subscribe to my email list.
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