How to safely store Bitcoin using a mobile wallet (and what’s happening now)

Preface

Whenever someone asked me about the price of a currency, I would always reply: Ask the number of users in the long term, and ask God in the short term. It seems that I have to add one more sentence now: Ask the central bank in the short term :)

Shenzhen will soon pilot the (blockchain-based) digital currency version of the RMB after the Spring Festival (China Securities Network "Central Bank Digital Currency System Sample is expected to be launched after the Spring Festival, Shenzhen may become a digital currency pilot"). This has not yet been piloted, and Bitcoin is already 8888. Once the pilot is launched and the government and society recognize blockchain as a form of currency, Bitcoin will not be able to rise to the sky. In addition, there are a series of problems such as platform leverage, futures, volume manipulation, lending, unplugging, and black market makers. The market risk is absolute, and it is inevitable that retail investors will be severely cut several times. So you know:)

Of course, regulation will not kill (or cripple) existing large platforms. Russia did this once in February 2014 (NetEase Technology " Russia joins the ban, Bitcoin trading extends offline "). However, from the trading volume of Russia on LocalBitcoins.com (the largest over-the-counter Bitcoin trading platform), we can see that this ban is basically meaningless. Instead, it will completely transfer Bitcoin trading to the over-the-counter and underground, becoming a paradise for money laundering and foreign exchange flight .

The best example of the compliance role played by exchanges is the Yishidun money laundering case. Yishidun, which made a profit of 2 billion through high-frequency trading in the stock market, once tried to transfer funds using Bitcoin. If it were not for BTCC's strict anti-money laundering review, the 2 billion would have been laundered overseas long ago (NetEase Finance "Yishton made 2 billion by manipulating futures and considered using Bitcoin for money laundering").

Russia finally recognized the legality of Bitcoin (Phoenix Finance "Russia declares legal status, Bitcoin continues to soar" Babbitt "Finally waited for you, Russia welcomes the first Bitcoin exchange"). With the precedent of Russia, the central bank will surely not do such a stupid thing again. Therefore, the government must choose to manage the exchange well, rather than manage it to death, or even shut it down, which can also be seen from CCTV2's "Economic Information Network" today.

This regulation is carried out under the background of "CSRC: Concentrated Cleanup and Rectification of Illegal Trading Venues within Half a Year". From the current situation, the most direct measure is to stop spot leverage (financing and currency lending) and strictly control the volume. The high volatility caused by spot leverage is a nightmare for retail investors. Retail investors who are used to the daily 10% price limit will be liquidated in batches when they encounter such a 30% surge and plunge in a few hours. Those who have not been liquidated are also scared to sell at a loss and never touch Bitcoin again.

Interestingly, history always repeats itself. After the 4.15 notice in 2014 (limiting deposits to exchanges), the industry tried to exercise self-discipline in this way (Five major Bitcoin trading platforms call for industry self-discipline), promising to stop margin trading, collect spot fees, and make the platform transparent, etc. The market was quite encouraged at the time, and it rose from 2,500 to 4,200.

Looking back now, this kind of industry self-discipline is a joke. Since the industry is unable to discipline itself, relying on external discipline may not necessarily be a bad thing.

For long-term value investors, after the central bank's suppression and bubble deflating, the time has come for the currency price to approach the value line (user number line) and the low point of the bubble index.

(For the explanation of this picture, see "Also Talking about 4,000 yuan is the beginning of the Bitcoin bull market")

Since yesterday, more than a dozen people have asked me how to transfer bitcoins purchased from exchanges to their own wallets and store them safely. It seems that this tutorial can't be delayed any longer.

1. Bitcoin storage solution selection

To store Bitcoin in the safest way, cold wallets are recommended, but cold wallets are too complicated and troublesome to use. The only result of talking to newbies about cold wallets is that they continue to keep their coins on exchanges: (

Therefore, a solution for storing coins that is safe enough but easy for novices to use is needed. The first choice is mobile wallets. There are many viruses and hacker Trojans on computers, but mobile phones are much safer. Many people have retired Android phones. They format the old phones and restore them to factory settings. They only install a mobile wallet + back up the seed number (private key), shut down the phone at ordinary times, and only turn it on when needed. This is not less secure than a cold wallet, but it is easy to use for many novices .

There are many choices for mobile wallets. The safest one is of course the official mobile wallet Bitcoin Wallet https://bitcoin.org/zh_CN/choose-your-wallet. However, the official wallet is not easy to use. To install it from the official website, you have to go through the firewall to install the Google App Store. If you don’t know how to install the Google framework, at least you have to go through the firewall to download the apk file from https://github.com/bitcoin-wallet/bitcoin-wallet/releases to install it. After installation, you can’t back up the private key once and for all, and you have to pay attention to the newly generated change address. Therefore, you might as well use other third-party wallets that are easier to use, such as Bither Wallet.

2. Mobile Wallet Tutorial

This tutorial is for Bitcoin Wallet version 1.6.1. Other versions may have slight changes:

1. Format and clear your phone

Dig out your retired Android phone, or buy one from Taobao if you don’t have one. A second-hand phone from big manufacturers like Huawei for around 200 yuan will be enough.

Restore the phone to factory settings, format and clear everything. For example, for Huawei phones, go to Settings → Advanced Settings → Backup and Reset → Restore Factory Settings, check "Format internal storage space", and then select "Reset phone". After the phone is reset, do not install any other apps (including updating pre-installed apps) except the Bitcoin wallet to ensure safety.

2. Install the Bither Wallet

Open the official website of Bither Wallet bither.net through the browser on your phone and download and install the Bither Wallet.

This tutorial will try to put the screenshots of several steps into the same picture for easy viewing, the same below.

3. Create a new HD account

After opening the Bither Wallet app, click the plus sign in the lower left corner, create a new HD account, and agree to a series of permission requirements such as calling the camera to generate a random number.

HD accounts are used to store Bitcoins without the hassle of finding change addresses. Ordinary private keys need to be backed up one by one, while HD accounts generate n private keys through a seed. As long as the seed is backed up, all private keys are backed up.

The last password is the wallet's permission password. It is required for operations such as issuing coins and exporting private keys.

4. Save HD torrents

(Pay attention) Keeping the 12 words of HD seed safe is the most critical step in using a Bitcoin wallet. If your phone is lost or damaged, you can restore your Bitcoin on any other phone with these 12 words. Of course, this also means that if someone else knows these 12 words, they can steal your Bitcoin . So make sure these 12 words are backed up in multiple places (not lost) and backed up safely (not leaked).

It is generally recommended to use the following two backup methods at the same time:

A. Copy them on paper : You can use some techniques, such as taking a book, copying the 12 words on different pages, and putting the book in a safe for safekeeping.

B. Package and encrypt the files and save them in the mailbox : On a safe computer without network connection (for example, you can restart the computer and follow the instructions of "How to enter safe mode on a computer" to enter safe mode without network), enter 12 words and save them as a text file. Then use compression software such as WinRAR to encrypt and package the text file and send it to multiple mailboxes or network disks for storage.

Be careful not to use a single-location storage method . For example, copying on paper + saving in a USB flash drive may seem like two backup methods, but if there is a fire, you may lose your phone + paper backup + USB flash drive backup at the same time. Once your phone and all backup methods are destroyed, even God cannot help you recover your Bitcoin . Therefore, it is very necessary to package and encrypt, and send to multiple mailboxes or network disks for storage.

The password you use here must be long and secure enough (even if hackers get it, they can't crack it violently), and make sure you can remember it even after a few years . If you are really worried about not being able to remember a long password in the future, it is recommended to use your most commonly used password and repeat it 3 to 5 times to ensure that you can remember it.

Here you can also use the same techniques as those copied from the book above, for example, download the complete collection of xxx novels (TXT version), insert these 12 words into a certain novel file, and package them together, so that people will be confused even if they get them. But as long as you remember one word, you can find it by searching for it in all novel files.

5. Get the Bitcoin address of your mobile wallet

After creating a new HD account and backing up the HD seed, you can transfer Bitcoin to the wallet.

"Bitcoin address" is similar to a bank account number. Knowing the "Bitcoin address" allows you to transfer Bitcoin to your wallet. When copying the address manually, be careful to distinguish between uppercase and lowercase letters, but don't worry about copying it wrong. If you copy it wrong, it will not match the address check digit, and no coins can be sent to the wrong address. If you don't want to copy the "Bitcoin address" above manually, you can click the QR code on the right, and then scan the QR code with QQ on another mobile phone to get the "Bitcoin address" and then send it to "My Computer" through QQ. Once again, please don't install QQ or any other apps on your wallet phone.

6. Add a withdrawal address on the exchange

Here we take OKcoin.cn as an example. In the Bitcoin exchange, add the "Bitcoin address" obtained above to the "Withdrawal Address".

If it is a "Bitcoin address" that you need to withdraw frequently, you can check the "Verify Address" box. After verifying it once, you will not need to verify your mobile phone + email address every time you withdraw money.

7. Withdrawing coins from exchanges

It is recommended to test with a small amount of BTC (such as 0.01BTC) first.

Due to the recent transaction congestion caused by the continuous increase in the number of Bitcoin users, if you are not in a hurry to withdraw your coins (for example, withdrawing them to your own wallet for long-term storage), you can choose the lowest "network fee" of 0.0001, which will generally take tens of minutes to a few hours to arrive in your account.

If you need to withdraw money urgently, you can increase the handling fee appropriately according to the "best handling fee" calculated at https://btc.com/stats/unconfirmed-tx. The size of a transaction is generally 0.22KB~0.37KB, so if the "best handling fee" is 0.0008 BTC/KB, you need to fill in a handling fee of 0.37KB*0.0008 BTC/KB=0.0003 BTC or more to ensure that it arrives in the next block (usually 10 minutes).

8. Withdraw to mobile wallet

After withdrawing funds, you can check the withdrawal status of the exchange. When the status changes to "remitted", you can see the transfer in your mobile wallet.

Note: If you withdraw a large amount of Bitcoin, in order to comply with the government's anti-money laundering laws and regulations, the exchange may require you to provide real-name authentication information such as your ID card. Please cooperate.

9. Issue coins from mobile wallet

After the withdrawal transaction has at least 1 confirmation, click "Send" to send the Bitcoin to other addresses. For example, let's try sending it back to the exchange for recharge.

Use your mobile phone to scan the QR code of the exchange address

Transactions are visible in the wallet after the coin is issued

10. Restore HD account from backup

If you plan to use a mobile wallet to deposit a large amount of coins, please be sure to test using the "HD seed" to restore the HD account once . When the Bitcoin wallet is just installed (no HD account has been established yet), you can choose to restore the previous HD account, but if an HD account already exists, you cannot restore another HD account. Therefore, you need to delete the Bitcoin wallet app that you just installed (please send all Bitcoins before deleting it) and then reinstall it.

If there is still balance in your wallet, please check the correctness of the HD account + all hot wallet private key backups again. If there are coins, it is best not to delete the wallet, but try to restore the HD account on another safe phone to avoid accidents.

After restoring the backup, you can see the previous HD account. Wait a few minutes and wait for the wallet to synchronize your transactions, then you can see the previous transactions. If the previous transactions have not been synchronized for a long time, please select "Gear Settings in the upper right corner → Advanced Options → Reload Transaction Data". If you still can't see the previous transactions, please select "Blockchain.info" in "Advanced Options → API Settings", change a block data source, and then "Reload Transaction Data".

11. Notes:

1. Please keep your mobile wallet turned off when not in use. If you do not use your wallet for a long time, please remember the backup email address and compressed package password every 3 to 6 months.

2. If you need cold wallet-level security, you can put your phone into airplane mode after downloading the app and completely disconnect from the Internet. Install the app while disconnected from the Internet and generate a Bitcoin address.

Although the mobile phone cannot see the coins transferred to the wallet at this time, you can view the related transactions of this Bitcoin address through the block browser. For example, you can view the two send and receive transactions of the address 1MjGt2EQCicLueSjfUcgEcLrPZ8HrSgUGg in the article through https://btc.com/1MjGt2EQCicLueSjfUcgEcLrPZ8HrSgUGg.

When you need to transfer the coins in the future, connect your phone to the Internet and perform the coin transfer transaction simultaneously.

3. Do not use an Apple phone to install a mobile wallet. Apple has the highest control over your phone. If Apple removes the wallet app, the wallet app installed on your phone will not be able to be opened.

4. Do not download mobile wallets from various Android app stores that are not official websites, otherwise you may download a modified fake version.

5. Use hardware wallets with caution. Hardware wallet manufacturers may add backdoors to hardware wallets (for example, through weak random numbers or pseudo-random numbers, the private key is controlled within a certain known range, and your private key can be brute-forced even without an Internet connection). However, it is impossible for mobile phones from large manufacturers to add backdoors to Bitcoin wallets.

6. If the wallet is used normally, do not upgrade to the new version casually unless you really need some of the new version's features.

7. If you have any questions or concerns when using Bither, please go to http://8btc.com/bither to discuss.

postscript

The significance of storing your own Bitcoin is self-evident. Please remember that the coins on the exchange (or other off-chain wallets) are not your coins, but the exchange's IOU to you . As for whether this IOU is risky and whether it will be redeemed, you can only ask God:)

There has been no good wallet tutorial before, and even many people in the cryptocurrency industry are afraid to store their own coins for fear of losing them. This tutorial is a very detailed tutorial, and it strikes a good balance between ease of use and security. In terms of ease of use, it is equivalent to a mobile app, and anyone who knows how to use a mobile phone can understand and learn it. In terms of security, it is infinitely close to a cold wallet, and detailed reminders of possible problems and risks are given. If you want to own Bitcoin that truly belongs to you, and want to own truly sacred and inviolable private property, please start by downloading the Bitcoin wallet and keeping 0.01BTC yourself .

If you have any questions about this tutorial, please reply to let us know so that we can improve it.

Welcome to follow my Weibo to get the most timely and in-depth analysis:

http://weibo.com/ltc1btc

Expansion & Bull Market Series:

January 22, 2016: [Bitcoin faces a critical choice] We urge all holders to support the 2MB expansion.]

March 11, 2016: [Basic Science] Can Bitcoin support all human transactions?

June 26, 2016: "4,000 yuan is the beginning of the Bitcoin bull market"

October 15, 2016: [Completely end the debate between hard and soft forks] Safe hard forks are soft fork expansions [English Ver]

October 20, 2016: "On the Correct Approach to Bitcoin Upgrading (and Refuting ahr999's "Consensus Rules")"

October 29, 2016: "Pouring cold water on Zcash - With Deep Black, does the market really need Pure Black?"

November 4, 2016: "Beware of Exchange Risks Under Tightened Foreign Exchange Regulation"

November 22, 2016: "Why do we firmly oppose Core's soft fork Segregated Witness? Jiang Zhuoer, who has invested tens of millions of real money in mining, tells you the answer!" [English Ver]

December 22, 2016: Weibo: "Update of the bubble index and other data in "Also on 4,000 yuan is the beginning of the Bitcoin bull market""

December 31, 2016: Weibo post: "Telling you something that is extremely scary when you think about it carefully"

January 4, 2017: Weibo: "This may be the last time that the bubble bull market can soar 10 times"

January 11, 2017: Weibo: "The central bank has finally completed the task of deflating the bubble. This round of bull market has a habit of correcting 40% after each new high."

January 13, 2017: "Happy to hear that BTCC and Huobi have stopped margin trading, OK has reduced leverage to 1x, and all fake coins in the market have been wiped out"