A Trezor is expensive, and may be hard to acquire depending on location – particularly if you don’t want to alert governments and corporations that you either own (or are extremely interested in owning) Bitcoin. A USB can cost as little as as a few dollars, can be bought at almost any store, can be stored in a discrete and safe place, and is easy to duplicate – so you can spread out your Bitcoin savings for better security if you wish.
Whist you keep some sats on your mobile wallet for day-to-day applications, you can keep your main stash on a discrete USB stick back at home. You can move funds between your mobile wallet and bank stick, and grab it in a pinch if you’re fleeing from a governmental regime – in which case, because of GPS and WIFI triangulation, you’ll want to leave leave your mobile devices on a bullet train headed in the opposite direction to you.
Running your own full node is the most secure way to use Bitcoin, but the setup is not appropriate for this application. This tutorial will teach you how to easily turn a cheap USB into a pocket-sized banking device which you can take anywhere, anytime.
The Electrum Wallet | Windows Portable Version
We will be using the Electrum Wallet for this application. Whist it checks off some favorable merits (non-custodial, open-source, non-proprietary) it’s particularly handy for installing a Bitcoin wallet onto a USB stick, because of it’s windows portable version.
Typically, when you open the .exe file for other wallets, even if you downloaded the .exe onto your USB stick, the setup wizard will typically install the application into the %appdata% file of your computer, so the wallet isn’t on the USB; it is on the computer. The setup wizard of the Electrum portable version sets up all the back-end files on your USB stick directly, so you can access it from any computer with a USB drive, and the sensitive files aren’t left behind.
Electrum also sports burner addresses, to improve your anonymity on the Blockchain, and supports the lightning network.
Installing the Electrum Wallet onto a USB stick
WARNING: Before you do anything with crypto, ensure that you are using a VPN (Virtual Privacy Network). It’s also worth noting that it’s extremely important not to contaminate your non-KYC Bitcoin with KYC coins. I will be writing on this subject in the near future.
Plug your USB stick into your computer, and open it. Use a fresh stick that isn’t actively needed for other things; you’ll want to store it securely later.
Open the .exe file, choose auto connect, and click next.
Type in the name of your new wallet, and click next. When you do this, the wallet will be created with that name.
Choose standard wallet if you’re just starting out. Higher security setups are available (two-factor authentication and multi-sig) and you can also import a Bitcoin address or private keys if you like.
Select “create a new seed” and click next
Next, a 12 word string will appear. This is called your “seed”. Write this down on a piece of paper. You’ll want to keep this safe, and never put it online or type it into your computer. Keep this offline, best yet in your own brain if you can confidently remember it. Never enter this into any electronic device. With this seed, if you ever lose your USB stick, you can recover your wallet with these 12 words. If someone finds out what your 12 words are, they can easily hack into your wallet, steal your Bitcoin, and there will be nothing you can do to stop them. You are solely responsible for your security and assets.
Once you’ve got it written down, click next.
NOTE: If you want to practice stealing/recovering this wallet, go ahead. If you do, I don’t recommend storing any Bitcoin on it, because anyone can now access it. I will never use this wallet, and invite you to use it for practice if you wish to.
Next, write your code into the text box. This is to check that you have recorded it correctly.
Create a password. Confirm the password. Encrypt wallet file, and click next. A strong password is best. This is the last line of defence if someone finds your USB stick and tries to steal your money.
Depending on your preference, click yes or no to the pop-up.
You’re set up, but lets just run some checks.
See if your new wallet is in the folder.
How to use
History tab shows date, description, and amount (volume) of transactions, as well as the history of your balance after these transactions.
Send tab is where you send Bitcoin to another person/wallet. (1) select the address of the receiver either by (a) pasting from clipboard, or with the QR code version of their address (b for camera scan, c for scan from image file). (2) you can optionally add a description. (3) enter the amount, and (4) allows you to choose to send all the Bitcoin in the wallet (max amount). You can clear the page (5) or save it for later (6). When you’re ready to send, click Pay (7).
Receive tab allows you to set up addresses to receive Bitcoin. You can, optionally, add a description (1) and a request amount (2). You can choose if and when this address will expire (3), and if you need to start over, just click clear (4). When you’re ready, click new address (5) and your address will appear.
After you click new address, the receive cheque will appear (1) and the receiver-address will appear in the top right. You can either copy the QR code (a) or copy the address to your clipboard (b).
Behind it’s super-simple design, there are lots of other features to the Electrum wallet. You may notice that Electrum supports the Lightning Network, but that is a topic for another day.
To access the wallet after you’ve either closed it or ejected the USB stick, simply open the USB stick again and click the .exe file, select the wallet you’re using, and enter password you created. Under “View” you can choose to show more tabs, and under “Tools” you can change your preferences, but for the purpose of the tutorial (how to set up a simple USB Bitcoin wallet) that’s all you need to know.
Joke of the day:
Why won’t the government embrace Bitcoin?
They hate the idea of Proof Of Work.