With this in mind, Proton Wallet was created—a digital wallet designed to make using Bitcoin more accessible and secure for everyone.

Proton Wallet describes itself as “the most secure way to store Bitcoin” and is the result of a team based in Switzerland, a country known for its strong privacy and security laws.

But what makes this wallet so special? Why does it stand out among so many other options on the market?

If you’re new to Bitcoin or looking for a practical solution to protect your coins, keep reading. Let’s explore how Proton Wallet can be a powerful ally in your journey into the world of Bitcoin.

Let’s dive in!

What is Proton Wallet and how was it created?

Proton Wallet is a Swiss digital wallet designed to combine advanced security with ease of use for storing Bitcoin.

More than just a digital wallet, Proton Wallet is part of an ecosystem that has prioritized privacy and security for over a decade.

It all began in 2014 with the launch of Proton Mail, an email platform that revolutionized the market by offering end-to-end encryption to protect communications. Since then, Proton has expanded its operations, remaining committed to creating trustworthy and accessible solutions.

The wallet is operated by Proton Financial AG, an independent Swiss subsidiary of Proton AG.

Additionally, Proton AG’s primary shareholder is the Proton Foundation, a nonprofit organization dedicated to promoting privacy and security in the digital world. This structure reflects the company’s mission: to provide high-quality tools that respect user privacy, often for free and with open-source code.

Despite being a recent addition, Proton Wallet already introduces an innovative approach. Developed within the Proton Blockchain, it enables the integration of verified identities with fast, secure, and fee-free payments.

Therefore, by choosing Proton Wallet, you’re opting for a solution that goes beyond the basics. It’s more than just a wallet—it’s a reflection of a continuous commitment to privacy, security, and technological innovation.

And the best part?

Just like other Proton services, the wallet is free and open-source, allowing anyone to explore, use, and contribute to its evolution.

If you’re a Bitcoiner who values privacy and seeks tools that genuinely respect your data, Proton Wallet is a choice that deserves your attention.

Key features of Proton Wallet

Proton Wallet is a hot wallet, meaning it is connected to the internet and designed to make using Bitcoin seamless in daily life.

Currently, it is available for desktop, Android, and iOS. However, it does have some notable limitations for Bitcoiners: it does not yet support the Lightning Network, meaning all transactions must be conducted on-chain.

This is an important factor to consider if you’re looking for a solution for fast, low-cost payments.

What makes Proton Wallet interesting for all users?

While it’s not perfect, Proton Wallet offers features that may appeal to those who prioritize security, privacy, and simplicity.

Let’s take a closer look:

• Self-custodial: This is for those who follow the Bitcoin mantra: “Not your keys, not your coins”. With Proton Wallet, you have full control over your private keys. This means that no one — not even the Proton team — can access your Bitcoin. It’s total sovereignty over your sats, the way it should be.
• Sending Bitcoin via email: This function is unique and practical. Proton Bitcoin Wallet allows you to send and receive Bitcoin using email addresses, eliminating the need to deal with long alphanumeric addresses and making transactions easier, especially for beginners. However, this feature only works among users with Proton accounts.

• Privacy-focused: The wallet generates new public addresses for each transaction, making it harder to track your financial history. If you value your privacy (and who doesn’t?), this is a huge advantage compared to other wallets that can reuse addresses and compromise your security.
• Open-source: Total transparency! The Proton Wallet code is available for audit by anyone, allowing anyone interested to review and suggest improvements, ensuring greater security and trust in the wallet.
• Easy to use: The interface of Proton Wallet was designed to be intuitive and simple. Even those without technical knowledge can use it without difficulty. The goal is to make Bitcoin accessible to everyone, regardless of their experience level.
• Integrated Bitcoin purchase: Through partnerships with third-party services, you can buy Bitcoin directly within the wallet using fiat currency.
• 24/7 human support: This is a bonus that not all wallets offer. If you encounter a problem, you can count on human support available 24/7. So whether you’re solving a technical detail or a larger problem, you’re not alone.
• Passphrase: You have the option to set up a passphrase, an extra secret phrase that only you know. This additional security layer is never stored by Proton, meaning that even if someone discovers your username and password, they will not have access to your wallet.
• Two-Factor Authentication (2FA): With this feature enabled, you add an extra layer of security to accessing your wallet. This means that, besides your password, an additional verification step (usually via an authenticator app or SMS) is required.

Well, now that you know the main features of this wallet, let’s understand how to use it in practice!

A simple guide to using Proton Wallet

Creating a Proton Wallet is straightforward and follows the same setup process as most other hot wallets on the market.

Proton Wallet is available across multiple platforms, offering flexibility for different types of users. Currently, you can use it in three main ways:

• Web browser: Access it directly from your computer without installing anything.
• Android app: Available on the Google Play Store, providing mobility for those who prefer using the wallet on their phone.
• iOS: Also available on the App Store.

One of Proton Wallet’s biggest advantages is its quick and easy setup. In just 5 to 10 minutes, you can create your account, configure your wallet, and start using it—whether to send, receive, or buy Bitcoin.

This ease of access is a huge plus, especially for those taking their first steps into the world of Bitcoin.

Now, let’s go through the step-by-step setup!

Step 1: Access the official website

Go to the Proton Wallet website. On the homepage, click the “Protect My Bitcoin” button to begin creating your wallet.

Step 2: Create or Enter a Proton Email

Next, you’ll be redirected to the wallet setup page.

Here, you’ll need to either create a new Proton Mail email address or sign in with an existing one. This email will be linked to your wallet, making transactions and notifications more convenient.

Step 3: Set the Default Currency

Once inside the wallet, you’ll land on the main screen, where you can select your default currency (e.g., USD or EUR for conversion purposes).

At this stage, writing down your private keys is not mandatory, but you can access them anytime in the wallet settings.

Step 4: Understand How It Works

Before you start using the wallet, a brief overview will explain how Proton Wallet functions. The wallet also emphasizes that it is self-custodial, meaning you alone are responsible for your private keys and recovery phrases.

Step 5: Access the Home Screen

Uour wallet is now ready!

On the home screen, you’ll find the main features:

• Receive Bitcoin
• Send Bitcoin
• Buy Bitcoin directly using fiat currency

All these functions are clearly visible and easy to access, even for those new to Bitcoin.

That’s It!

See how simple it is to set up Proton Wallet? Now you can start using it securely and efficiently to manage your Bitcoin.

Pros and Cons of Proton Wallet

Proton Wallet offers several compelling features, making it a great choice for those seeking a practical hot wallet with a strong focus on privacy. Its intuitive design, quick setup, and open-source nature make it an attractive option for many Bitcoin users.

Additionally, its strong commitment to privacy—aligning with Bitcoin’s core philosophy—is a clear advantage.

However, there are some important limitations to consider before fully adopting this wallet:

1. Lack of Lightning Network Support

While Proton Wallet allows on-chain transactions, it does not yet support the Lightning Network. This means you can’t take advantage of instant payments and near-zero fees, which are essential for those who use Bitcoin for everyday transactions.

Without Lightning, Proton Wallet is less versatile, especially for small transactions or users who prioritize speed and cost-efficiency.

2. No UTXO Management

For advanced Bitcoin users, the lack of UTXO (Unspent Transaction Outputs) management in Proton Wallet may be a drawback.

Managing UTXOs is important for optimizing fees and organizing your sats more efficiently, so users who rely on this feature may find the wallet limiting.

3. Dependence on Proton Email

Unlike many non-custodial wallets, Proton Wallet requires you to use a Proton Mail email address. This means that to create a wallet, you must either:

• Already have a Proton account
• Create a new Proton email

This requirement raises questions about the necessity of this integration and its impact on privacy and security.

Wallet Available for Everyone

Proton Wallet has exited the beta phase and is now available to all users.

Currently, there are a few plans available:

• Visionary Plan ($29.99/month): Access to 50 wallets, 6 TB of storage, and many additional benefits.
• Free Plan: Access to 3 wallets and 1 Proton Email.
• Proton Unlimited Plan ($10/month): Access to 10 wallets, 15 Proton Emails, 500 GB of storage, private VPN, encrypted password manager, and more.

Summing up

Proton Wallet has potential and introduces interesting ideas, such as email integration and a strong focus on privacy. However, the lack of Lightning Network support and UTXO management may be drawbacks for more advanced Bitcoiners.

If privacy is your top priority and you don’t mind the current limitations, it might be worth testing. However, if you need a more complete solution, it may be better to wait for future updates or explore other wallet options (check out our complete guide on the blog!).

As every good Bitcoiner knows, choosing a wallet is an important decision. Evaluate your goals and priorities before deciding which one to use. After all, sovereignty over your Bitcoin should always come first.

Until the next article, and OPT OUT!

The post What is Proton Wallet? Is it worth using, and how does it work? appeared first on Area Bitcoin.

With features such as CoinJoin support and the ability to conduct transactions via radio and SMS, the wallet attracted many privacy-conscious users. However, it also drew the attention of users who were considered “less well-intentioned” by governments. This ultimately led to the app being removed from the Google Play Store and even the arrest of the developers behind it.

In this article, we’ll explore how this story unfolded and its implications for privacy in the Bitcoin world.

How did this story begin?

The attention of U.S. authorities wasn’t exactly new for Samourai Wallet, largely due to its “aggressive” or “questionable” marketing approach.

In 2022, amidst the war between Russia and Ukraine, several Russian oligarchs were sanctioned and excluded from international financial systems.

In response to this movement, the official Samourai Wallet account tweeted: “Welcome Russian oligarchs.” Unsurprisingly, this statement didn’t sit well with U.S. government officials.

In another case, after Europol labeled Samourai Wallet as an “emerging threat,” the wallet’s CTO responded with a fiery retort on X (formerly Twitter): “Do you see us shitting in our pants?”

As the saying goes: “Ask for trouble, and you’ll get it.”

Arrest of the Developers

In April 2024, arrest warrants were issued for Samourai Wallet CEO Keonne Rodriguez, 35, and CTO William Lonergan Hill, 65. Both faced charges of money laundering and “operating an unlicensed money transmission service.”

Keonne was arrested in Pennsylvania, USA, while William was detained in Portugal, where authorities prepared for his extradition to the U.S. However, on July 9 of the same year, Hill’s attorney proposed a $3 million bail, with the condition that Hill be allowed to remain in Portugal. The judge accepted this proposal, requiring Hill to attend court hearings in the United States whenever summoned.

This case bears some similarities to the Tornado Cash controversy in the Ethereum shitcoin ecosystem the previous year, which involved similar charges in a different context.

Analysis of the Accusations from a Technical Perspective

From a technical standpoint, the accusations simply don’t hold up. Let’s break down the charges, starting with the allegation of money laundering.

No Bitcoin wallet software—whether it’s Samourai Wallet, Electrum, Blue Wallet, Green Wallet, etc—actually holds your bitcoins. These applications are merely tools that facilitate interaction with the Bitcoin network. Technically, your bitcoins reside in your addresses, which are derived from your seed phrase.

The balance in these addresses is recorded on Bitcoin’s public ledger, the Blockchain. The Blockchain itself is decentralized, with every node on the network maintaining a copy of these records.

By the same logic used to arrest the accused developers, should we also arrest everyone who holds a copy of the Blockchain? Should we arrest all Bitcoin users running a full node?

Now, let’s address the second charge: “operating an unlicensed money transmission service.”

Bitcoin, by design, operates without the need for governmental approval or oversight. Does this mean that anyone transferring as little as 1 satoshi is committing a crime? Is it even feasible—or economically practical—to “arrest” every Bitcoin user worldwide?

These questions remain open, for both Bitcoin users to reflect on whether “these demands can realistically be followed to the letter” and for government agents to consider whether “these requirements make logical sense.”

The Samourai Wallet

Samourai Wallet is a privacy-focused Bitcoin wallet offering features like offline transactions, CoinJoin, and Ricochet, all designed to protect users from government and corporate surveillance.

Created as a direct response to increasing financial surveillance initiatives, the wallet offers a range of innovative tools to prioritize and safeguard user privacy.

Notable features included:

• Whirlpool: A CoinJoin protocol that mixes transaction inputs and outputs, making it harder to trace funds on the blockchain.
• Ricochet: Added “hops” within a Bitcoin transaction, increasing the number of intermediate addresses between the source and destination addresses, complicating Chain Analysis efforts.
• Offline Transactions: Sending transactions via SMS or radio allowed the wallet to be used in completely disconnected environments, expanding accessibility for users in areas with limited or nonexistent infrastructure, or where connectivity might be monitored by dictatorial governments.

It’s essential to emphasize that although these features are neutral in their design and legal to use, regulators interpreted them as tools that could facilitate hiding illegal activities in the case of Samourai.

The Right to Privacy vs. State Regulation

The case of Samourai Wallet ignited a debate between two seemingly compatible but fundamentally conflicting principles: individual privacy and constant surveillance “in the name of collective safety.”

Argument for State Regulation

Advocates of state regulation, including the U.S. government, argue that non-compliance with rules like Know Your Customer (KYC) and Anti-Money Laundering (AML) enables illicit activities.

This argument resonates with many, especially during times when major media outlets highlight rising crime rates — whether physical or virtual — and the use of cryptocurrencies in crimes such as drug trafficking and terrorist financing.

A frequently cited example to support this argument is the Tornado Cash case (mentioned earlier), which was used by the North Korean hacker group Lazarus to launder proceeds from illicit activities.

Argument for Privacy

For privacy advocates and defenders of the Samourai Wallet, privacy is fundamentally a human right. People should not be treated as criminals for desiring more privacy. After all, just because someone has nothing to hide doesn’t mean they stop using curtains or closing their windows.

Moreover, the “pro-privacy” group fears that these increasing regulations could establish legal precedents used to justify broader crackdowns on any individual employing tools not aligned with centralized controls — or worse, targeting dissenters of the prevailing regime’s ideology.

The right to privacy is even enshrined in the Universal Declaration of Human Rights, Article 12, which states:

“No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence […]. Everyone has the right to the protection of the law against such interference or attacks.”

This declaration, drafted and signed by multiple nations in the aftermath of World War II, serves as the foundation for many constitutional frameworks in the signatory countries.

Curiously, these principles often seem to be respected only when it’s convenient, don’t they?

Another layer of irony lies in the hypocritical argument of “criminalizing Bitcoin use because part of the network is employed for illicit purposes.” If this logic were followed consistently, fiat currencies like the U.S. dollar or Brazilian real should also be banned. It’s well-documented that the dollar is widely used by major banks and criminal organizations to launder money or sidestep legal accusations.

Just to cite two examples, there is The Telegraph‘s report on the Wagner mercenary group, which used HSBC and JP Morgan accounts to launder money by purchasing mining equipment. And in another case, the BBC reported that JP Morgan Chase paid a $290 million “fine” to “settle charges relating to abuse suffered by Epstein Island victims.”

Ashigaru Wallet: A Response to the Samourai Case

After the arrest of the Samourai Wallet founders, an independent group of developers launched the Ashigaru Mobile Wallet, a fork of the original Samourai Wallet code.

The Symbolism of the Name “Ashigaru”

The name “Ashigaru” originates from the Japanese word 足軽 (pronounced あしがる, a-shi-ga-ru), which literally means “light feet.” Historically, it referred to common infantry soldiers during Japan’s feudal era.

While samurai symbolized the feudal lords, ashigaru represented the everyday soldiers, embodying the spirit of “power to the people.” This idea aligns with the Bitcoin community’s frequent slogan, “We are all Satoshi.”

According to the project page, the name symbolizes: “Individuals of humble origins who, when needed, equip themselves with the tools available to fight during times of significant change.”

What is the Ashigaru Wallet?

The Ashigaru Wallet is a Bitcoin wallet built from the Samourai Wallet’s code, developed by an independent group of developers with a strong emphasis on decentralization.

As the developers explain: “We believe that anyone can engage in peaceful, voluntary, and private commerce on the Internet, without being subject to tracking, surveillance, or censorship.”

To achieve this, the wallet takes two key approaches: requiring users to connect to their own nodes and enabling Tor by default on all project servers.

• Nodes Bitcoin in Ashigaru: Unlike Samourai, which offered a non-custodial wallet option, Ashigaru requires users to configure and use their own Bitcoin nodes. This approach decentralizes application usage and significantly reduces potential attack vectors.
• Tor Integration for Project Servers: Instead of using mainstream platforms like GitHub to host its code, Ashigaru developers opted to store it on servers running Tor (The Onion Routing). This prevents, for example, a single court order sent to GitHub’s headquarters from bringing down the wallet’s entire infrastructure.

By adopting these and other features, Ashigaru Wallet reaffirms its commitment to privacy.

The development of this application stands as a testament to the resilience of the privacy-focused community, which continues to create robust tools despite legal and regulatory challenges. Much like the mythological Hydra of Lerna—“cut off one head, and two grow in its place”—the takedown of Samourai Wallet has led to the rise of two (or more) even stronger solutions.

Conclusions

The arrest of the developers behind Samourai Wallet marks a pivotal moment in the Bitcoin ecosystem.

As governments push for greater transparency and “compliance with local rules,” the Bitcoin community continues to resist and, more importantly, demonstrate resilience by offering even more private and powerful tools — upholding Bitcoin’s founding philosophy as a medium for anonymous, decentralized transactions that empower individuals.

The outcome of this case will likely shape the future of privacy tools, testing the boundaries of regulation and Bitcoin’s ability to function beyond state control.

At the heart of this battle lies a fundamental question: Is privacy an inherent right that can be freely exercised, or must it be subordinated to the demands of public safety?

If there’s one clear takeaway from the Samourai Wallet case, it’s that the fight for privacy is far from over. The lessons learned will continue to influence the development and adoption of privacy-enhancing technologies across the Bitcoin ecosystem.

Until next time, opt out!

The post The Turnaround in Privacy: From Samourai Wallet to Ashigaru appeared first on Area Bitcoin.

In this article, we’ll explain how Tails and the Electrum wallet work and provide a step-by-step guide on using them together.

Let’s get started!

What is Tails?

Tails (The Amnesic Incognito Live System) is a privacy-focused, Debian-based operating system designed to provide anonymity and security.

It runs directly from a USB stick or DVD, leaving no traces on the computer it’s used on. By default, Tails stores system data in the computer’s RAM, which is erased as soon as the computer is powered off (unless the user opts to save data in an encrypted partition—don’t worry, we’ll show you how to set this up later).

Another standout feature of Tails is its ability to route all internet traffic through the Tor network, offering users a high level of anonymity online.

What is Electrum?

Electrum is a lightweight, open-source Bitcoin wallet known for its security and reliability. It offers advanced features such as multi-signature transactions, hardware wallet integration, and decentralized transaction verification.

As a lightweight wallet, Electrum doesn’t require downloading the entire Bitcoin blockchain, making it fast and convenient to use, especially on resource-limited systems like Tails.

Why Combine Tails and Electrum?

Combining Tails and Electrum creates a powerful solution for enhanced security and privacy.

Tails safeguards user privacy by anonymizing identity and location through the Tor network, while Electrum offers a secure and reliable platform for managing bitcoins. Together, they enable anonymous financial transactions, keeping personal data and private keys safe from attackers or potential breaches.

Requirements for setting up Tails

In this tutorial, we’ll guide you through configuring Tails on Windows, following the official Tails website’s instructions.

To set up and use the Electrum wallet on Tails, you’ll need:

1. A USB drive with at least 8 GB of storage for Tails.
2. A Windows computer running Windows 7 or later.
3. A system with at least 2 GB of RAM and a 64-bit architecture (unsure if your machine meets these specs? Check here).
4. The latest version of Tails, which you can download from the official Tails website.
5. Optional: A phone or secondary device to follow this tutorial while setting up your computer. 🙂

Step-by-step Tails setup

1. Downloading and Installing Tails

As mentioned, the first step is to download Tails on the official Tails website and create a startup pendrive

1.1 Download Tails:

Visit the Tails website, navigate to the “Download Tails” section as shown in the screenshot below, and download the latest version of Tails.

1.1.1 (Optional) Verify the Tails image signature:

Verifying file signatures is important to ensure the downloaded file hasn’t been corrupted or maliciously modified during the download process.

Once verification is complete, you should see the following message.

1.2 Installation on USB Drive:

Now, you’ll need software to write the Tails image to your USB drive, such as Etcher.

After downloading Etcher, you can close your browser. Then, go to the Downloads folder (or the folder where you saved the Etcher app) and run the app.

Click the blue “Flash from file” button and select the Tails image you just downloaded (in our first step).

After selecting the image, we’ll now choose the device to write the image to (your USB drive).

Click the blue middle button “Select target” and choose your USB drive.

Finally, click the last blue button “Flash” to finish the process of writing Tails to the USB drive.

Now, just wait for the process to complete.

Success! You’ve now configured your USB drive with the Tails Operating System.

1.3 Booting Tails

With the flash drive connected to the computer, configure the system to boot from the USB.

On Windows, you can do this by opening the Start menu in the bottom bar, then holding down the Shift key, and clicking On/Off ▸ Restart.

Now, click on “Use a device” and select your pendrive with the tails image. If there is no option with “tails” in the name, choose the option that has “Removable Device“

Depending on the model of your computer, you may still need to access your system’s BIOS or boot menu to select the flash drive.

If all goes well, you will finally see the Tails selection screen.

Select the first option:

And that’s it, easy, right? But it’s not over yet!

On the next screen you will see the settings of your Tails. Now, click on “Start Tails“.

2. Initial Configuration of Tails

Once Tails starts, you will be presented with a welcome screen (similar to the previous one) where you can configure the language, keyboard layout, and other settings.

Preferably, do this after setting up the persistent storage on the device. Since Tails has an “amnesic” nature, it will “forget” all data not saved in persistent, encrypted storage (hence its magic and its great appeal for privacy purposes).

So, let’s set up the persistent storage in Tails:

2.1 Setting up the Persistent Storage

One of the key features of Tails is the ability to create persistent and encrypted storage. This allows you to securely save files and data between Tails sessions.

We will enable this feature to save the private keys of your Electrum wallet for future use.

In the main environment:

Click on “Applications”, then on “Persistent Storage”, and on the next screen, click “Continue”.

On the following screen, choose a strong password.

This step is crucial, as if someone gains physical access to your USB drive, they could access everything stored on your Tails, except for your Electrum wallet (as we will configure a password for it later).

Nevertheless, an ounce of prevention is worth a pound of cure. So, after ensuring you’ve chosen a strong password, click “Create Persistent Storage”.

On the next screen, activate the options exactly as shown in this tutorial. Therefore, only disable or enable what you deem necessary if you know what you’re doing.

In the “Personal Documents” section, keep the “Persistent folder” option enabled.

In the “System Settings” section, keep the “Welcome Screen” option enabled.

In the “Network” section, enable “Network Connections” (to save Wi-Fi passwords, for example).

In the “Applications” tab, enable the “Electrum Bitcoin Wallet” option (to save your Electrum wallet settings) and optionally enable the “GnuPG” option if you plan to verify GPG keys in the future (e.g., downloading Ian Coleman’s BIP39 seed generator and verifying the software’s integrity later).

Finally, in “Advanced Settings”, keep the “Additional Software” option enabled.

Done! Now just restart your computer, and your Tails will be 100% configured. This time, when logging in, remember to enter the password for your persistent storage.

To do this, enter the password for your persistent storage volume in “Persistent Storage” and click “Unlock Encryption”.

After a while, the settings for your persistent storage will be loaded.

When everything is ready, click “Start Tails”.

Next, we’ll finally configure our Bitcoin wallet in Electrum.

3. Setting up the Electrum Wallet

Electrum comes pre-installed on Tails, eliminating the need for additional downloads. Follow one of the three options below to open the Electrum app:

Go to Applications (top left corner of the screen) → Internet → Electrum Bitcoin Wallet.

Go to Activities → All Applications (nine dots in the bottom bar) → Search for Electrum Bitcoin Wallet.

Go to Activities → All Applications (9 dots in the bottom bar of the screen) → Search in the top bar for Electrum → Electrum Bitcoin Wallet

3.1 Choosing a Wallet Name:

When opening Electrum, you’ll be prompted to choose a wallet name. Let’s create a wallet named “area_bitcoin_wallet.”

Click “Next.”

3.2 Selecting Wallet Type:

On the next screen, you’ll have several options, including creating a wallet with two-factor authentication, importing Bitcoin addresses or private keys, or even setting up multi-signature wallets.

For this guide, select the standard wallet option: “Standard Wallet.”

3.3 Generating Wallet Seeds:

On the next screen, there are options to import a seed, use a master key from another wallet, use seeds from a connected hardware wallet, or generate a new seed.

In this case, we will generate a new seed through Electrum by selecting “Create a new seed”.

The 12 words of your wallet will be generated and displayed to you. Be sure to write them down carefully as they are your only key to accessing your bitcoins!

If you choose to also generate a “passphrase,” click on “Options” and check “Extend this seed with custom words”, then click “OK”.

Once done, a new screen will appear for you to choose the passphrase. After entering it, simply click “Next” again.

If you do not wish to generate a passphrase for your wallet, you will be redirected directly to the screen below, asking you to confirm the words of your seed.

However, if you entered a passphrase, remember to also type it at the end of your 12 words, or Electrum will not allow you to proceed to the next step.

3.4 Creating a Password to Encrypt the Wallet

Next, you will be asked to create a password to encrypt your wallet files.

This is an additional security measure. However, if you already consider your setup “secure enough,” you can skip this step (by clicking “Next” without entering a password).

That said, if you choose to create a password, preferably create a strong one and then click “Next”.

Congratulations! You now officially have a Bitcoin wallet set up with Tails + Electrum!

In the next section, we’ll demonstrate how to practically use the wallet we just created to send and receive bitcoins.

Excited?!

4. Practical Use of Electrum

Before we proceed, it is crucial to emphasize: Never, under any circumstances, connect this Tails machine to the internet while your wallet containing your seeds is open.

If it becomes necessary to connect to the internet with the wallet open — whether to update its balance or to send a transaction to the Bitcoin network — it is preferable to create another wallet containing only your extended public key to check your balance (watch-only mode), ideally connected to your Bitcoin Node using TOR for maximum privacy.

4.1 Creating a Watch-Only Wallet

To check the extended public key of your wallet, click on “Wallet” → “Information”.

Your extended public key will be displayed under “Master Public Key”. Copy it and import it into the device of your choice (for example, a Blue Wallet or even another Tails device).

In this tutorial, we’ll show that it is possible to use this setup on a single device. However, you must always ensure you disconnect from the internet before opening your wallet containing the seeds.

The recommendation to use the watch-only wallet on another device is a safer approach and ensures that “you protect yourself from yourself.”

With your extended public key in hand, create a new Electrum wallet by navigating to “File” → “New/Restore”.

Select a name for the wallet and click “Next”.

In this example, we’ll use the name “area_bitcoin_wallet_watch_only” to differentiate it from the primary wallet containing our seeds.

Select “Standard Wallet” and click “Next”.

On the next screen, instead of selecting “Create a new seed,” choose “Use a master key” and then click “Next”.

Paste your extended public key into the designated field and click “Next” again.

Note: If the wallet is being created on another Tails device, you can save this key in a text file and transfer it using a USB drive, for example.

On the following screen, you’ll be prompted to create a password specifically for this watch-only wallet.

Up to this point, you should have stored three passwords: the persistent storage password, your seeds, and a password for your Electrum wallet containing the seeds.

If you feel it necessary, you can create an additional password for this wallet, which will only track the balances of your addresses.

In this instance, we will not create a password for this wallet because this Tails device has a single purpose: managing bitcoins without accessing the internet, which minimizes the risk of malware infection.

Click “Next” without creating a password.

Before displaying the wallet, a warning will appear reminding you not to send funds to this wallet unless you own its seeds. Since we are indeed the owners of this wallet, click “OK.”

Now, you have two wallets:

• One that will sign your transactions, containing your seeds, and must never connect to the internet.
• One that will track the balances of your wallets and can receive funds without needing to open the other wallet containing your seeds.

Close your primary wallet and leave only your “watch-only wallet” open for the next steps in the tutorial.

4.2 Receiving Bitcoins in the Electrum Wallet

In your watch-only wallet, navigate to the “Addresses” section.

Select the Bitcoin address where you want to receive funds, right-click, and then click “Details” to display the details of that Bitcoin address.

Remember, the sequence of numbers and letters in “Address” is your Bitcoin address. You can either copy it and send it to the payer or generate a QR code for this address by clicking on the QR Code icon (as shown below).

Clicking the QR Code icon will display a window similar to the one shown below.

You can send this QR code to the payer or scan it using a device containing another wallet of yours if your goal is to transfer funds between your own wallets.

To update your balance, you’ll need to connect to the internet. Before doing so, ensure that your other wallet (the one containing your seeds) is closed, especially if it’s on the same Tails device.

After establishing an internet connection (via Ethernet or Wi-Fi), select “Connect to Tor automatically” and then click “Connect to Tor network.”

Once the message “Connection to Tor network successful” appears, you can close this window.

Your Electrum wallet should now display a blue circle in the bottom corner instead of a red one. This symbol indicates that Electrum is connected to the internet and also via Tor.

After some time (depending on the miner fee paid and Bitcoin network traffic), your transaction will appear in the “History” section, and your balance will appear in the bottom left corner next to “Balance.”

4.3 Sending Bitcoins Using the Electrum Wallet

To send funds to another Bitcoin wallet using Electrum, follow these steps:

1. Disconnect from the internet.
2. Create a PSBT (Partially Signed Bitcoin Transaction) in the watch-only wallet.
3. Load this PSBT into the wallet containing your seeds.
4. Sign the transaction.
5. Export the signed transaction as a TXN file.
6. Close the wallet containing your seeds (so Electrum encrypts it again).
7. Reconnect to the internet.
8. Broadcast this transaction using your watch-only wallet, ensuring your seeds remain completely secure.

In your watch-only wallet, ensure you’re disconnected from the internet and navigate to the “Send” section.

Note that the red circle in the bottom-right corner signals you’re offline.

In the “Pay to” field, paste the recipient’s Bitcoin address.

Use the “Description” field to include details about the payment (optional, e.g., to describe the reason for the transaction).

Specify the amount to be sent in the “Amount” field. To send the wallet’s entire balance, click “Max.”

As we are disconnected from the internet, we need to define the fee to be paid for the transaction manually, since it will not be possible to consult the blockchain and choose an appropriate amount directly in Electrum

For that, click on “Tools” → “Preferences” and select “Advanced Preview.”

Return to the “Send” tab and click “Pay.” You’ll be redirected to the following window:

Click on the arrow in the “ETA” button (bottom-left corner of the menu). After that, you’ll see 3 options,  Select “Static.”

On another device, access a Bitcoin block explorer (e.g., mempool.space) to check current network fees.

Based on these rates, configure the fee to be paid according to your convenience. If you want to pay less, put a lower fee. If you want the transaction to be processed quickly, pay a higher fee, and so on.

After setting the fee, a final screen will appear before exporting the PSBT of this transaction.

On the bottom left corner click “Export” → “Export to File.”

Choose where to save this file and click “Save.” Once done, you’ll see the following confirmation message:

Now, while still disconnected from the internet, switch to the wallet containing your seeds. To do this, go to the top menu and click on “File” → “Recently Open” → “your_wallet_name.”

Once done, you will be prompted to enter your password. After that, in the top menu, go to “Tools” → “Load Transaction” → “From File.”

Select the .psbt file you exported earlier.

After doing so, you will see a screen very similar to the one in your watch-only wallet, except this time the “Sign” button will be enabled.

Click on this “Sign” button.

You will be prompted to enter your Electrum wallet password once again. After entering it, click “OK.”

Next, export this signed transaction. Click once more on “Export” → “Export to file.”

Now, choose where to save this file and click “Save.” 

We’re almost there! Now we just need to broadcast this transaction to the Bitcoin network. To do this, close the wallet (the one containing your seeds), reconnect to the internet, and open your watch-only wallet.

Click on “Tools” → “Load Transaction” → “From File.”

Select the .txn file, which is your signed transaction.

On the next screen, click “Broadcast.”

A confirmation message will appear with the ID of your transaction.

Done! Your transaction has now been signed, and your bitcoins have been sent to the destination address.

Check the “History” section to see your latest transactions, including this most recent transfer, which will be confirmed after some time.

Tails + Electrum Recommendations

While the Tails and Electrum combination offers excellent security and anonymity, following these recommendations will help you maximize their benefits:

1. Keep Tails Always Updated: Regularly update Tails to ensure you have the latest security patches and bug fixes. This is critical for maintaining a secure environment.
2. Use the Tails + Electrum Environment Exclusively for Bitcoin Transactions: Avoid using the Tor browser within this setup for general browsing or accessing the dark web. Doing so may expose you to additional risks. To minimize vulnerabilities, dedicate this environment solely to sending and receiving bitcoins.
3. Avoid Unnecessary Plugins in Electrum: Third-party plugins can introduce security risks. Keep your Electrum wallet setup simple and free from unnecessary add-ons.
4. Always Use Secure Networks: Avoid public or unsecured Wi-Fi. Although Tails routes traffic through Tor, untrusted networks can still pose risks, especially if someone is monitoring local traffic.
5. Consider Using a Watch-Only Wallet on Another Device: To minimize the risk of losing your bitcoins due to human error, use a watch-only wallet on a separate device to monitor balances. Keep the device containing your seed phrase offline at all times, ensuring maximum security.
6. Use a Bitcoin Node When Possible: By default, Electrum connects to a randomly selected Bitcoin node. To enhance privacy and prevent exposing your extended public key, use your own Bitcoin node, preferably one running on Tor. Options like Umbrel or Raspblitz are excellent choices for setting up a personal node.

Conclusion

The combination of Tails and Electrum provides a powerful solution for those seeking enhanced security and privacy in Bitcoin transactions. With Tails protecting your operating environment and Electrum securely managing your Bitcoin, this setup offers a significant level of anonymity and defense against potential attackers and surveillance.

That said, this setup does come with some challenges. It requires careful attention and a certain level of technical knowledge to create bootable operating system images on removable media, which may pose difficulties for non-technical users.

I hope this article has helped you better understand the Tails + Electrum combination and eased any hesitations about using it.

Thanks for reading, and take control of your privacy—opt out!

The post Tails + Electrum Wallet: A Complete Guide for You appeared first on Area Bitcoin.

As Bitcoin continues to grow as a form of wealth, the challenge of ensuring funds are accessible after death has become increasingly important. Liana offers a robust solution to this, combining security, usability, and flexibility.

In this article, we’ll explore what the Liana wallet is, how it works, its key features, and why it marks a significant advancement in the world of Bitcoin wallets.

Let’s dive in!

What is Liana?

Liana is a Bitcoin wallet that stands out by offering a built-in inheritance feature.

Launched in July 2023, it was developed by Wizardsardine, the same team behind the Revault project—a protocol that enhances security and recovery options for multisig wallets.

The lead developers involved in creating the wallet include Antoine Poinsot and Kevin Loaec, both with extensive experience in developing Bitcoin security solutions.

Liana enables users to set up an automated, secure process to transfer their funds to beneficiaries after a period of inactivity or in the event of death.

In short, the wallet is designed to allow seamless Bitcoin asset transfers without intermediaries, ensuring full user control.

How does Liana work?

Liana uses a multisig (multi-signature) and time-lock configuration to enable its inheritance features.

In simple terms, the user creates a wallet where they control the primary key but can assign a secondary key (or group of keys) that can access the funds after a certain period of inactivity or a predetermined time lock.

The process works in two main steps:

1. Initial Setup: The user creates a multisig wallet with a primary key (which they control) and an inheritance key (which could be assigned to a family member, friend, or another beneficiary). They also define a time frame, after which the inheritance key can access the funds if the primary key is not used.

2. Inheritance Execution: If the set time period passes without the primary key being used (for instance, if the user passes away or loses access), the inheritance key can spend the funds. This setup removes the need for third parties or lawyers to manage the user’s Bitcoin after death.

But how does this work technically? It all happens through something called Miniscript.

Let’s dive into what that means!

What is Miniscript?

Miniscript is a Bitcoin scripting language created by Blockstream in 2018 to simplify the creation of complex smart contracts.

It was developed to improve existing tools, like Pieter Wuille’s output descriptors and the Partially Signed Bitcoin Transaction (PSBT) protocol. One issue with PSBT was its need for specialized tools to finalize transactions, making system integration more complicated.

To address this, Andrew Poelstra, a Blockstream researcher, proposed a more structured approach to scripting, which led to the creation of Miniscript. He collaborated with Wuille and, with help from Sanket Kanjalkar, further refined Miniscript to make it more efficient and secure.

Miniscript simplifies the development and understanding of Bitcoin scripts, making them easier to read and use compared to traditional scripts. It enables the creation, testing, and application of complex spending conditions in a more reliable way, without the need to write custom code for each case.

In Liana’s case, Miniscript is used to define inheritance conditions through a combination of multisig and timelocks. This allows for easier configuration of these features and provides a clear way to analyze how and when funds can be accessed.

What are the use cases for this wallet?

1. Family Inheritance: One of Liana’s primary use cases is ensuring that a person’s Bitcoins are transferred to their family or beneficiaries after their death. By assigning the inheritance key to a spouse, child, or loved one, users can secure their funds for the future.
2. Business Succession Planning: This wallet can also be used by businesses holding Bitcoin in their reserves. Through its multisig and inheritance features, companies can set up a secure asset transfer process in the event of bankruptcy, changes in leadership, or the death of an executive responsible for the primary keys.
3. Protection Against Private Key Loss: Liana offers protection against private key loss as well. If a user loses access to the main key, the inheritance key can still be used after the time-lock period to recover the funds.

Main features of the Liana Wallet

Now that you understand how Liana works, let’s dive into its key features:

1. Non-custodial:

One of Bitcoin’s core principles is self-sovereignty, and Liana fully respects this principle by being a non-custodial wallet. 

With Liana, the user retains full control of their funds until the inheritance key is needed. There’s no need for intermediaries, ensuring the user has direct control over their Bitcoin throughout the process.

2. Multisig and Time-lock:

As discussed in this article, Liana uses a multisig configuration with a time-lock. The primary key controls the funds day-to-day, while the inheritance key can only be used after a period of inactivity from the primary key. This gives the user peace of mind that their funds won’t become inaccessible in the future without compromising control while they are alive and active.

3. Simple and Intuitive:

Although multisig and inheritance functionalities may seem complex, the Liana team has worked hard to create a super intuitive and accessible user interface. Even people with limited technical knowledge can set up and use Liana efficiently and practically.

4. Open and Transparent Code:

Liana is an open-source wallet, meaning anyone can review and contribute to the code. This promotes transparency and trust in the software’s security, as well as allows the Bitcoin community to contribute to the wallet’s continuous development and improvement. 

The entire project is available on GitHub.

Learn about the plans to use Liana

Since Liana is quite different from other Bitcoin wallets, you’ll need to choose a plan to get started.

Liana offers two main plans:

1. DIY Plan: This is the do-it-yourself option where you download the wallet and set everything up using your own knowledge. If you go with this plan, the wallet usage is free.
2. Inheritance Plan: This more comprehensive plan costs €500 per year. It includes descriptor backup storage, timelock update reminders, security checks and update recommendations, pre-configured wallet setup, live setup with a dedicated consultant in a 1-on-1 session, technical support (including phone calls), and assistance in key recovery for designated beneficiaries.

In addition to these two plans, Liana also offers individual services for those who prefer to pay for specific features rather than the full inheritance plan.

Let’s take a closer look at each of these services:

Peace of Mind Package: 

• Price: €5 per month.
• Descriptor backup storage. 
• Timelock update reminders
• Security checks with update recommendations.

Onboarding Package: 

• Price: €200 one-time payment.
• Guided setup with Liana support.

Support Call: 

• Price: €60
• Video call to get guidance on the wallet.

All plans can be paid for in Bitcoin.

Which hardware wallets are compatible with Liana?

Liana currently supports all Ledger products (Nano S, Nano S Plus, Nano X), as well as Bitbox02, Coldcard, and Jade.

At present, Liana’s functionalities are limited to these hardware wallets, but additional compatibility is expected in the near future.

Comparison with other Bitcoin inheritance solutions

Currently, there are few solutions on the market that offer native inheritance functionalities integrated directly into a wallet.

Many people turn to external options, such as traditional wills or custodial services, to ensure access to their Bitcoin after death. However, these approaches come with several disadvantages, such as the need to trust third parties and increased risk of censorship or theft.

Liana, on the other hand, eliminates these vulnerabilities by providing a fully decentralized and secure way to transfer funds to beneficiaries. This makes it an appealing choice for those who want to ensure their digital assets are preserved and transferred securely, staying true to Bitcoin’s principle of minimizing reliance on third parties.

Conclusion

Liana represents a significant advancement in the Bitcoin wallet ecosystem, offering an innovative and much-needed solution for Bitcoin inheritance planning.

By combining the strength of multisig with time-lock features and a user-friendly interface, Liana enables seamless succession planning while ensuring that Bitcoin funds remain secure and accessible in the future.

This wallet is particularly appealing to users who value Bitcoin’s self-sovereignty philosophy and want to proactively plan for the transfer of their assets to future generations.

We’re excited to see how Miniscript and Liana will continue to evolve in the years to come!

I hope you enjoyed this article, and until next time, Opt Out!

The post Liana: A Great Bitcoin Wallet with Inheritance Support appeared first on Area Bitcoin.

Phoenix is a non-custodial, mobile Lightning wallet offering tools for both beginners and advanced users. It’s also one of the most popular options for Lightning payments. While it recently withdrew from U.S. app stores, it continues to operate normally in Australia, the UK, and other countries.

In this article, we’ll explain how the Phoenix Wallet works and how to use it.

Let’s get started!

The Lightning Network and Channel Management

Before diving into how the Phoenix Wallet works, it’s important to understand the basics of the Lightning Network and its channel management system.

The Lightning Network is a second-layer solution for Bitcoin, designed primarily for smaller, faster payments. When Lightning was launched in 2017, its usability was not well understood, but it has since seen significant improvements.

Lightning is an off-chain payment protocol, meaning it operates parallel to the Bitcoin blockchain using nodes and payment channels that connect users globally. Essentially, it’s a network linked to the blockchain, but not all transactions are recorded on the blockchain.

To illustrate, think of Bitcoin as a building where every floor is connected to the ground floor. Anyone entering or leaving must pass through the lobby and use the elevator to reach the desired floor. Similarly, higher layers like Lightning rely on the base layer for entry and exit points within the protocol.

How to open a Lightning channel

To open a Lightning channel, two parties need to lock funds (bitcoins) in a multisig address. This address requires multiple signatures to approve transactions, working like a joint Bitcoin account that prevents a single point of failure. This setup happens on layer 1, similar to passing through the building’s lobby.

The bitcoins locked on the blockchain represent the channel’s maximum capacity. For example, if you and I want to open a payment channel on the Lightning Network, we’ll need to deposit funds into a multisig address.

Within this channel, we can exchange value as long as it doesn’t exceed the total amount we locked.

It’s like having a prepaid tab at a bar—you can order anything as long as it’s within the prepaid limit.

When you want to close the tab and leave the bar (close the Lightning channel), you settle the bill at the cashier. Similarly, when a Lightning channel is closed, the final transaction is recorded on the blockchain, and the balance is settled.

In summary, the only transactions recorded on the blockchain are the opening and closing of the channel.

How does channel management work?

I can open a Lightning channel with you by depositing 2 bitcoins, and you do the same. This gives us a shared capacity of 4 bitcoins, allowing us to send satoshis instantly and at a very low cost, as long as we don’t exceed the total value.

Anyone can open a Lightning channel, as long as they understand the technical requirements, run a node, and lock bitcoins into the channel.

However, opening Lightning channels isn’t always cheap. Both parties need to contribute liquidity (capacity), meaning some funds get locked and can’t be spent outside the channel.

Additionally, these channels operate off the Bitcoin blockchain, enabling multiple transactions to occur within a single channel, which can later be settled as one transaction on the blockchain.

Closing channels can also be expensive, as Bitcoin network fees apply and vary depending on the time.

Channels have capacity limits, and if you reach the maximum, you’ll need to close the channel and open a new one. These processes can be complex for the average user, which is why Phoenix was designed to simplify channel management.

What company is behind the Phoenix Wallet?

The company behind the Phoenix Wallet is ACINQ, a French startup based in Paris focused on developing products and services for the Bitcoin ecosystem.

Since 2015, ACINQ has been contributing to the Lightning Network using its technology base called Eclair, a complete implementation of Lightning that allows users to run their own Lightning nodes.

ACINQ is known as a major liquidity provider and operator on the Lightning Network, running the largest node in the network. In 2017, they introduced Eclair Mobile, a Lightning-enabled wallet, though it had a more technical user interface.

To create a simpler experience, they redesigned it from the ground up and launched Phoenix—named after the mythical bird that rises from its ashes.

How did the Phoenix Wallet come about?

Phoenix Wallet was launched on December 12, 2019, to address the need for a more user-friendly experience on the Lightning Network. It was designed to provide users with a simple and accessible interface, making it easier to interact with Lightning payments.

Features of the Phoenix Wallet

When Phoenix launched with version 1.0, it was considered a second-generation wallet, offering a significantly better user experience compared to ACINQ’s earlier Eclair Mobile wallet.

Some of its initial features included:

• Automatic Channel Opening: Phoenix automatically opens a new channel if there’s not enough inbound liquidity to receive a payment.
• Turbo Channels: It allows you to use a Lightning channel as soon as it’s created, without waiting for confirmation of the channel’s opening.  
• Backup of Peers: Previously, to back up a Lightning wallet, you needed to back up all channels; with Phoenix, just back up the wallet’s 12 words, and your money will be there.  
• Zero Reserve + AMP: It allows you to spend your money as a single balance, even if it’s internally distributed across multiple Lightning channels.  
• Cross-Network Swaps: Send and receive on-chain transactions seamlessly, even if you’re using the Lightning network.
• “Trampoline” Payments: Phoenix finds the closest payment route to connect with another wallet’s node to make a payment, without needing a direct node between sender and receiver. 

Additionally, Phoenix is a self-custody wallet, meaning you control your private keys and are responsible for securing them.

While these features provide a more user-friendly experience, they also come with certain trade-offs.

What are the Trade-offs?

First of all, Trade-offs are compromises made to prioritize certain features or choices, often at the expense of others.

In the case of Phoenix, one trade-off is that it only connects to ACINQ’s nodes, meaning that payment data (such as value and destination) is shared within ACINQ’s network. While this setup improves reliability and simplifies channel management, it comes at the cost of reduced privacy and network independence.

How is backup handled in Phoenix?

Backing up a traditional Bitcoin wallet is straightforward since you only need to secure the private key. However, with Lightning wallets, backups were more complex as they needed to be updated with each transaction.

From a Lightning protocol perspective, restoring an outdated backup is seen as cheating, allowing the counterparty to potentially seize all funds in the channel.

There are static backups, but they have two problems:  

• you need to make a backup every time you open a channel.
• and, restoring a channel implies closing a previous channel, which can be costly and time-consuming.

Some Lightning wallets offer backup via email, using Google Drive. In this remote backup system, they send an encrypted version of the channel data whenever it’s updated.  

ACINQ’s previous wallet, Eclair, worked this way.  

However, the problem with this solution is that it requires an external provider. Phoenix operates differently, using its peers as backups. Since Phoenix only connects with ACINQ’s nodes, controlling backups becomes easier.  

But the question remains: will these peers cooperate with me and “return” access to my wallet?  

The simple answer is YES, as the Lightning protocol itself has terms that incentivize the other peer to cooperate.  

Since Phoenix’s provider, ACINQ, maintains a non-zero reserve in the channels, it always has something to lose. Therefore, to recover your funds in a backup, the wallet only has two options: close and reopen channels, which would generate high costs, or help you recover them easily.  

Thus, the second option is more viable.  

As a result, Phoenix has implemented a way to recover funds similar to traditional Bitcoin wallets. If something happens to your wallet, such as losing your phone or uninstalling the app, simply download the app again, enter your seed phrase, and you’ll have recovered your funds and previously opened channels. 

However, the main challenge in Lightning wallet backups lies in managing open channels with other network participants. So, care must be taken.

Phoenix 2.0

After the initial release of Phoenix in 2019, a new version was developed in 2023, known as the third-generation Lightning wallet.

The latest version retains the strengths of the original while introducing significant improvements.

Dynamic Channels

The main upgrade in Phoenix 2.0 is improved channel management. Previously, users could maintain multiple channels, often leading to frequent new channel openings. This became problematic, as these channels would eventually need to be closed, resulting in high costs.

To address this, Phoenix introduced a technology called splicing, which enables the creation of a single dynamic channel. This simplifies channel management, allowing users to add liquidity as needed without opening new channels.

Previously, opening new channels would surprise users with a 1% fee or a minimum of 3,000 sats. Now, the fee is solely based on the mining cost for the transaction.

When a channel adjustment is necessary, Phoenix can predict if a Lightning payment will incur a channel management fee. Users will be notified in advance.

Check it out:

Atomic Swaps

Phoenix has also streamlined the cross-network swap process (e.g., swapping on-chain Bitcoin to Lightning satoshis and vice-versa), known as atomic swaps.

In some services, this process can be complex and rigid for users. Phoenix has automated it and now lets users choose the fee they want to pay.

Ah, and the rates have also changed with this Phoenix update.

Updated fees in Phoenix Wallet

The main change in Phoenix’s latest update is that previously there was a 1% fee on received payments, while now it’s 0.4% on payments made via Lightning.  

Below is the complete fee table:

Other Features of Phoenix 2.0

Beyond the updates mentioned, Phoenix also offers unique features not typically found in other Lightning wallets:

• Testnet version (Android only): This version uses test coins that have no real value and are meant for testing purposes only.  
• Your wallet is a Lightning node: Phoenix functions as a real and independent Lightning node that runs on your mobile device. You don’t need to run another Lightning node at home or in the cloud.
• It supports the on-chain network: It allows you to send and receive on-chain as a conventional Bitcoin wallet would.  
• Liquidity management for channels: You can request an increase in liquidity in your channel and even open additional channels as needed.

How to use the Phoenix Wallet?

Getting started with Phoenix is easy. While it has features for advanced users, it’s designed to be user-friendly for everyone.

Follow these steps to start using the wallet today:

1. Download the Phoenix Wallet

Start by downloading the Phoenix wallet. After a brief introduction, a screen will appear.

2. Create a new wallet

Select “Create New Wallet”. (Note: For iOS, only English is currently supported.)

3. Access your home screen

Once your wallet is created, you’ll see the home screen.

4. Back up your wallet

Now that your wallet is created, click the gear icon to access settings and go to “recovery phrase” to back up your wallet:

After clicking on Recovery Phrase, the screen below will appear.  

To view the seed phrase, click “display seed”, then scroll down and back up your wallet:

5. Send and receive satoshis

To send or receive satoshis, click “Receive” or “Send” on the home screen, and choose the Lightning or on-chain option.

What if my wallet disappears?

A common concern for users of hot wallets (mobile or desktop) is losing access if the wallet disappears or the provider goes out of business.

With governments becoming increasingly regulatory regarding privacy (e.g., the case of Samourai Wallet), many worry about the future of their wallets.  

In this regard, if something happens to Phoenix, your funds remain safe, but you won’t be able to move them. The solution is to perform a forced channel closure, which registers your funds on the on-chain network.

To do this, go to your wallet’s settings: Settings > Danger Zone, and click on “Force close channels.”

Phoenix will close the channels unilaterally, and after a wait of about 720 blocks (~5 days), your funds will be transferred back to the on-chain network.

After this, Phoenix recommends you to download the Electrum wallet and recover your funds there (since Phoenix provides your private keys).  

Follow these steps:  

1. Download Electrum.  
2. Create a new standard wallet.  
3. Select “I already have a seed.”  
4. Enter your 12 words, click Options, and check “BIP39 seed.”  
5. Select “native segwit (p2wpkh).”  
6. Wait for the funds to appear.

Controversy with the U.S. Exit

In 2024, the founders of Samourai Wallet were detained by the U.S. government, and the wallet’s website was banned. Samourai allowed users to perform coinjoins—a privacy-enhancing technique.

Coinjoin is a coin-mixing tool that lets users create transactions for themselves while mixing the coins in the process, making it more difficult to trace the transactions.

Amid increasing regulatory scrutiny, Phoenix decided to pull its app from U.S. platforms. They advised users to close their channels and withdraw funds by May 3, 2024, when the service was discontinued in the U.S.

This situation highlights the ongoing battle over privacy. Despite this, the wallet continues to operate normally in other countries, like Australia, the UK, and Canada.

Conclusion

Now that you know how to use the Phoenix Wallet and take advantage of its features, you can see how straightforward it is!

As discussed in this article, a wallet can be both simple and powerful, providing tools that support your financial sovereignty.

However, remember that mobile wallets are like pocket wallets you carry around. We don’t recommend storing large amounts in them—after all, you wouldn’t keep all your savings in your everyday wallet, would you?

Also, be mindful of the growing regulatory pressure on wallets and platforms. Choose an option that allows you to recover your funds in case of unexpected events.

I hope this guide has helped you better understand the Phoenix Wallet, and if you found it useful, share it with a friend—it really helps us!

See you next time, and opt out!

The post Phoenix: Review of this Lightning Wallet for Mobile appeared first on Area Bitcoin.

But what exactly is a passphrase? How does it differ from a seed? How is it different from other wallet passwords, and how can you add this extra protection to your Bitcoin wallet?

That’s what you’ll find out in this article.

Let’s dive in!

What is a Passphrase?

A passphrase, also known as a passkey, is a type of secret word that some Bitcoin and digital currency wallets offer as an optional feature.

For example, wallets like Jade and Sparrow allow you to create a passphrase after setting up your seed, which consists of 12 or 24 recovery words.

But what exactly is it, and why would you use it?  

A passphrase is an additional layer of security that you choose to add to your wallet. It can be any word or phrase and functions as the 25th or 13th word, depending on the number of words in your seed.

This means that if you need to recover your wallet on another device, you’ll need to provide the 12 or 24 recovery words from your seed along with the passphrase you set up.

Without the passphrase, you’ll lose access to your funds completely, making it just as important as your seed.

During setup, you can choose any word or phrase up to 50 characters, and it’s case-sensitive, so it’s crucial to enter it correctly.

Since a passphrase is often made up of multiple words, it can be easier to remember than a random string of characters, while still being more resistant to brute-force attacks.

However, it’s essential to be precise when typing it, as whatever you enter will be recorded as your passphrase.

So be extra careful not to make any mistakes when typing it!

What are the advantages of using a Passphrase?

1. Create alternative wallets to your main wallet

Each passphrase entered generates a new, blank wallet. This allows you to segment your accounts, where one passphrase could designate business accounts and other personal accounts, for example.

With a single cold wallet, you can manage both family and business needs, assigning each person their own exclusive wallet by using different passphrases.

This feature is especially useful in situations involving coercion or extortion. You can create a low-value wallet with a specific passphrase and provide access to that, while keeping your other, more valuable wallets protected with different passphrases.

2. Protect your wallet with an additional password you create

The passphrase acts as an extra layer of security for your wallet, serving as a password that you personally create. This makes unauthorized access much more difficult.

3. Enhance your backup security

If someone gains access to your seed (wallet recovery words), they still won’t be able to access your funds without the passphrase.

This also adds an extra level of security in the event of seed loss or theft, as the passphrase is required to access the wallet.

What’s the difference between a Seed and a Passphrase?

A seed is an initial value used to generate cryptographic keys, while a passphrase is a sequence of words or characters that acts as a password to protect encrypted information.

The seed is commonly used in random number generation algorithms, while the passphrase is used for authentication and unlocking encrypted data. 

Although both are related to information security, they serve different purposes.

In short, the 24-seed phrase provides the necessary entropy to protect your wallet from hacker attacks. The passphrase acts as a 25th word, which you can freely choose (up to 100 characters), to safeguard your wallet in case your seed is compromised.

To clarify the difference between the types of passwords — seed and passphrase — the image below illustrates three situations:

In the first scenario, the person did not configure a passphrase and used only the seed to access their wallet.

In the second, the person entered their seed and then set a passphrase with the word “Martha” to access funds in Wallet B.

In the third example, the person entered their seed and set a passphrase with the phrase “john’s best steakhouse 97” to access funds in Wallet C.

The key takeaway is that the passphrase is different from the seed. The seed consists of predefined words based on Bitcoin’s BIP39 standard, while the passphrase can be any information you choose.

But be warned! Again, if you forget or lose your passphrase, it’s a serious problem. Even if you have the seed, without it, you’ll lose access to your funds.

Which Bitcoin Wallets support Passphrase?

Not all Bitcoin wallets allow you to configure a passphrase, but you’ll find this feature in most major wallets.  

Here are some wallets that support this feature:

• Trezor
• Coldcard
• Bitbox
• Jade
• Blue Wallet

How to configure a Passphrase? (Step by Step)

As discussed throughout this article, various wallets allow you to configure a passphrase, and each has a slightly different process. For this example, we’ll use the Jade wallet, a Bitcoin-only wallet that is easy to set up and highly recommended.

There are two ways to add it to Jade Wallet:

1. During wallet setup, by opting for an advanced configuration.
2. By selecting “Options” from the main menu before creating an active wallet.

Once you configure your passphrase in Jade, it will be required every time you access your wallet, following the entry of your PIN or a temporary option like SeedQR.

Make sure to enter your passphrase correctly, as it is case-sensitive. There is no concept of an “incorrect passphrase” — any typo will simply generate a new wallet.

After entering your passphrase correctly and connecting to your wallet, take note of the fingerprint displayed in the bottom right corner of Jade’s screen (e.g., 249192D2).

This 8-character sequence is unique to your wallet and passphrase. If you access your wallet and this code appears differently, it means you’ve entered the passphrase incorrectly and are in a different wallet.

You can also adjust your passphrase settings in Jade!

To adjust your passphrase settings, power on Jade and navigate to the “Options” menu.

Then select BIP39 password.

Next, choose “Frequency” to decide how often you want Jade to prompt you for a passphrase:

• Never: You won’t be asked for a passphrase during login.
• Once: The passphrase will only be requested the next time you log in with your PIN or temporary access. You’ll need to return to this menu each time you want to use a passphrase. This option helps hide the fact that you are using a passphrase, enhancing security.
• Always: The passphrase entry screen will appear every time you log in.

Then choose “Method” to select how you want to enter your passphrase:

• Manual: A keyboard appears, allowing you to enter specific characters one by one. This is the default option for most hardware devices and offers the option to use uppercase and lowercase letters, numbers, and other special characters.
• WordList: This input method is designed for faster entry of longer, higher-entropy passwords based on the BIP39 word list. A random series of these words can be chosen as a password, and Jade will suggest BIP39 word options as you begin typing, speeding up the input process. Passwords using this method are easier to remember and can be entered more quickly than manually typed passwords while maintaining the same level of security.

Passphrase divides opinions among experts

The use of passphrases is a topic that divides opinions among technical Bitcoiners.

These differing perspectives can be summarized into two main schools of thought:

1. Bitcoiners who support Passphrase

Those in favor of using a passphrase argue that it provides an additional layer of security. Unlike the wallet’s PIN, which can be modified and stored on the device’s chip, the passphrase is not stored on the device and adds extra protection. Even if a thief manages to steal your seed, they won’t be able to access your account without the passphrase.

In this case, it’s recommended not to store the seed and passphrase together, or to choose a passphrase that you can easily remember.

A passphrase is often considered more convenient than a standard multisig, as you only need one device, one seed, and the passphrase to add an extra layer of security. It’s simpler! With traditional multisigs, you need to set up, back up, and store multiple seeds properly.

Additionally, another advantage of using a passphrase with single-signature addresses is that it provides more privacy compared to a multisig. It maintains a single-signature footprint on the blockchain, which is less distinguishable than a multisig transaction, which takes up more space and is more identifiable.

The more information someone has about how you secure your addresses, the easier it becomes for them to plan a targeted attack.

As block space becomes more limited, transaction fees for multisig addresses increase. This makes a passphrase a more cost-effective security option, as it incurs lower fees than a multisig setup.

However, the biggest risk with using a passphrase is human error—specifically, forgetting it. If you lose your passphrase, it’s equivalent to losing your entire seed. For this reason, some security-focused developers prefer using multisigs over passphrases.

2. Bitcoiners who don’t support Passphrase

Bitcoiners who do not recommend using a passphrase argue that multisig setups provide a higher level of security by requiring multiple signatures to authorize transactions, such as 2 out of 3 or 2 out of 4. This adds a greater safety margin against seed loss and reduces the risk of losing access to your funds.

With a passphrase, on the other hand, if you lose or forget that single passphrase, you lose all access to your funds.

Developers who prefer multisigs believe that, if properly managed, it’s highly unlikely that an attacker could steal or compromise all necessary components, such as devices, seeds, and wallet data. They also argue that accessing funds is significantly easier when relying on a passphrase, increasing the risk of potential compromise.

Moral of the story

In summary, while multisigs offer greater security than passphrases, a passphrase is easier to set up and use, and it also provides more privacy in transactions on the network.

In Bitcoin, there is no right or wrong—only choices and their consequences. You need to decide which risks you are more comfortable managing if your security model fails.

Choosing between single-signature (with or without a passphrase) and multisig isn’t an either-or decision. You can even use both.

For example, you might want to secure the majority of your assets in a multisig wallet, while keeping another wallet with smaller amounts in a single-signature setup with a passphrase for easier access.

The choice is yours.

It’s up to you to decide which additional security layer works best for you and which one you feel most confident handling. After all, sovereignty comes with the responsibility of understanding the benefits and risks of each option.

I hope you enjoyed this article, and don’t forget to share it with friends and family!

Until next time, and opt out

The post The Importance of Passphrase in Securing Your Bitcoins appeared first on Area Bitcoin.

In this article, you’ll gain a deeper understanding of how Opendime works and why it’s considered a fascinating tool in the world of Bitcoin.

Who is the manufacturer of Opendime?

Opendime (Bitcoin Stick) is a product of Coinkite, a Canadian company responsible for other notable products like Coldcard and BlockClock.

Rodolfo Novak

Coinkite’s co-founder and CEO is Rodolfo Novak, known on Twitter as NVK. Originally from São Paulo, Brazil, Novak chose to settle in Canada.

Before founding Coinkite, Novak co-founded Ripe Apps, served as Vice President of Product at Method: CRM, and was Director of Products at Quandl.

In addition to his contributions to digital currency hardware, NVK is an active figure on social media and at conferences, where he shares his insights on security, privacy, and blockchain technology.

What is Opendime?

Opendime is a compact USB device designed specifically to store and physically transfer Bitcoin. It functions as a disposable hardware wallet that can be passed between multiple people, similar to the exchange of physical money.

Resembling a USB stick, Opendime is extremely compact, measuring just 5 cm wide and 1 cm high, making it highly portable and easy to carry.

To keep costs down, the circuit board lacks a sophisticated coating. Instead, the individual components and their solder points are protected by a translucent plastic cover, which is highly durable and makes any tampering with the hardware visible.

On the front of the device, you’ll find the Opendime logo, the model version (which could be a commemorative edition), and access to release the private key.

On the back, you’ll see the word “Opendime,” a discreet Bitcoin logo, and the USB contact points.

Special Editions

In addition to the traditional “Legal Tender” edition, Coinkite introduced two other versions: one in orange (referencing Bitcoin) and another in green, which omits any mention of Bitcoin on the device for enhanced privacy.

The green version also features a slightly different shape.

Opendime Features

Opendime or Bitcoin Stick offers a unique way to store, transfer, and use Bitcoin, distinct from traditional cold or hot wallets that are installed and used repeatedly.

As a disposable hardware wallet, Opendime allows Bitcoin transfers without needing to go through the blockchain or require miner validation.

Let’s explore its main features:

• Read-Only USB Flash Drive Functionality: Opendime operates as a read-only USB flash drive and is compatible with any computer, laptop, or mobile phone. It contains a QR code and text files displaying the Bitcoin address and relevant information.
• Internal Private Key Generation: The private key is generated internally on the device during setup and is never revealed to anyone, not even the owner.
• Simple Bitcoin Transfer: Opendime allows you to transfer Bitcoin between parties without using the blockchain and without needing to wait for confirmations or pay additional fees. You simply hand over the loaded Opendime with the desired amount to whoever you wish.
• Use of Bitcoin Technologies: The device uses Bitcoin message signing, standard Bitcoin payment addresses (non-HD), and private keys in WIF format.
• Irreversibility of Balance: A unique feature is that once funds are loaded onto the Bitcoin Stick, the value can only be accessed by “breaking” the seal, making the operation irreversible. Once the seal is broken and the balance is redeemed or spent, the device cannot be reused for new Bitcoin deposits—it is single-use.
• Transferable Between Parties: Opendime can be passed between multiple parties as long as the seal is not broken.
• Limits: There are no minimum or maximum limits on the amount of Bitcoin you can store on the device.
• Bitcoin-Only: It’s important to note that Opendime is exclusively for Bitcoin storage. It’s a Bitcoin-Only wallet.
• Multilingual Support: The device supports several languages, including Japanese, English, Portuguese, French, and German.

Why use Opendime?

Transactions with Opendime are entirely “off-chain,” making them similar to conventional cash transactions in terms of privacy, as they leave no trace. Simply load the device with the desired amount of Bitcoin and, when ready to make a payment, hand it over to the recipient.

The recipient can easily verify the stored amount and check that the device’s seal is intact, ensuring the private key hasn’t been accessed and the transaction is legitimate.

There is no trace of this movement on the blockchain because the Bitcoin remains at the same address. The only difference is that ownership of the funds associated with that address has been transferred. Opendime can circulate between multiple people and facilitate numerous transactions without any record on the blockchain.

This not only optimizes blockchain space, significantly saving on mining fees after the initial user but also provides substantial privacy benefits. Additionally, it eliminates the wait time for traditional blockchain confirmations.

However, Opendime’s advantages extend beyond privacy and convenience.

You can use Bitcoin Opendime in the following ways:

1. As a Gift Card: You can gift someone Bitcoin by simply loading Opendime with a balance.
2. Direct Payment: You can also load the device with a balance and make a payment directly by inserting the amount into Opendime and handing it over to the seller.
3. Alternative to Paper Wallets: Opendime can be a reliable alternative to paper wallets, ensuring secure private key generation.

These features make Opendime a versatile tool for managing Bitcoin transactions anonymously and efficiently.

Where to buy this Bitcoin-Only Wallet?

Opendime is available for purchase through its online store, where you can pay using Bitcoin or a credit card.

How Much Does It Cost?

On the website, a pack of three Opendime units is priced at $69.

*Be sure to factor in shipping costs when making your purchase!

Since the products are shipped from Canada, customs fees may apply depending on your location.

Therefore, it’s a good idea to contact the supplier or online store for updated information on shipping costs and any potential customs fees before finalizing your purchase to avoid unexpected charges.

How does It work in practice?

Got your Opendime? Follow the setup steps below to start using it!

1. Setup

The first step is to plug Opendime into your computer, just like a USB stick.

You’ll immediately notice two flashing lights. Opendime has two LEDs, one green and one red, that light up when connected to a USB port.

These LEDs indicate the following:

• Green with short flashes: Opendime is sealed, meaning the Bitcoins are secure.
• Alternating red and green: The private key has been released.
• Solid green with short red flashes: The device is not yet configured.
• Rapid green flashing: The file system is being read or written.

These patterns were specifically designed to make tampering through minor hardware modifications difficult.

So, when you first connect Opendime to your PC, the green light will be solid, and the red light will flash, indicating the device isn’t configured yet.

In the Opendime folder, you’ll find a file called “readme.txt,” which provides detailed information about the wallet, and another file called “index.htm,” a quick guide to help with the setup process.

When you connect Opendime to a computer for the first time, it will prompt you to drag files onto the device to generate a unique private key. This key is securely stored on the device and cannot be extracted or viewed.

Simply drag some files (photos or documents) onto Opendime as if you were saving them to a USB stick. Don’t worry, the files won’t actually be saved on the device.

Keep doing this until Opendime “ejects.”

Now, reconnect Opendime to your computer, and you’ll see new files: “address.txt,” a QR code, and “private-key.txt.”

The “address.txt” and QR code contain the Bitcoin address for adding funds to Opendime, while the “private-key.txt” is the secret key for spending those funds. However, the “private-key.txt” file is useless until you “break” Opendime’s seal.

Click on the “index.htm” file, and you’ll see your Bitcoin address in both standard and QR code formats.

You can check the balance (which will be zero):

And confirm that the device is still sealed and the private key hasn’t been accessed:

Now, just add Bitcoin to your Opendime by sending sats to the provided address. Shortly after, the balance will appear in the “index.htm” file. If you wish, you can verify the address on a block explorer that shows Bitcoin transactions.

Checking the Balance

Once you’ve sent Bitcoin to the public address associated with Opendime, you can easily check the balance by either inserting the device into a computer or scanning the QR code associated with it.

Redeeming Bitcoin

Now that you’ve learned how to set up and check the balance, let’s understand how to access and spend the Bitcoin stored on Opendime.

To spend the balance, you’ll need to access the private key. The first step is to physically break the device’s seal or puncture it. This action reveals the private key, allowing you to transfer the Bitcoin to another wallet.

It’s important to note that once this procedure is done, Opendime cannot be reused.

You can use a clip or any pointed object that fits into the indicated circle on Opendime. To puncture it, you’ll need to apply some force.

What happens when you puncture and break the seal?

After puncturing and breaking the seal, reconnect Opendime to your computer. The red and green lights will flash, indicating that the device has been tampered with and its contents have changed. At this point, your private key will appear in the “private-key.txt” file.

The “index.htm” file will also change: instead of displaying the address, it will now show the private key along with a corresponding QR code.

From this moment, the process cannot be undone. The entire Bitcoin balance must be transferred to another address at once since the private key is now visible and could be accessed by malicious individuals.

With access to the private key, you can spend the funds by importing it into a Bitcoin wallet, such as Blue Wallet or Electrum.

After the balance is emptied, the device becomes unusable and can be discarded, as its security can no longer be guaranteed.

Opendime pros and cons

As we’ve discussed, Opendime is an innovative and unique method for storing and transferring Bitcoin, offering several features that appeal to Bitcoin enthusiasts.

However, like any technology, it has both pros and cons that are important to consider before incorporating it into your digital asset management strategy.

Here are the pros that make Opendime an attractive option, as well as the cons that might affect your decision to use it as a tool for managing your Bitcoin balance.

Pros

• Privacy: Transactions are off-chain, meaning there’s no record of the transaction on the blockchain.
• Simplicity: No software or complicated setup is required. There’s no need to memorize passwords or seed phrases.
• Tangibility: Turns digital money into something physical.
• Practical and Discreet: It’s easy to carry, lightweight, and goes unnoticed without drawing attention.
• Security: The private key is generated from entropy, and not even the initial owner has access to it until the seal is broken.

Cons

• Single-Use: Once the private key is revealed, the device cannot be reused.
• Cost: Since it’s single-use and costs $23 per unit, it may not be advantageous to buy Opendime for small transactions.
• Physical Risk: Like any physical object, the Opendime Wallet can be lost, stolen, or damaged.
• Storage Limitation: Due to its design, Opendimes are not intended for cold storage of large amounts of funds.

Conclusion

In summary, Opendime is a super cool tool for using Bitcoin privately, combining elements from both the physical and digital worlds. However, like any tool, it has advantages and disadvantages, with its ideal use being determined by each user’s needs and circumstances.

For those interested in exploring more about all the security measures Coinkite has incorporated into Opendime, you can check out the project’s white paper.

Additionally, all of Opendime’s code is open-source and can be reviewed by anyone on GitHub, providing greater transparency and confidence in its functionality.

The post Opendime: A USB Stick for Storing Bitcoin! appeared first on Area Bitcoin.

Security is extremely important for Bitcoiners, and the SeedSigner wallet manages to combine both security and accessibility in a single device.

Additionally, being open-source, this wallet allows anyone to verify the code behind its operation, enabling collaboration in identifying bugs and contributing to ongoing development, ensuring a high level of transparency and trust.

What’s intriguing about this project is that you can build a SeedSigner yourself from the comfort of your home, as long as you have the right parts.

Yes, you read that correctly! It’s possible to assemble a wallet from scratch and experience a taste of engineering sovereignty!

In this article, we’ll explore what SeedSigner is and how it actually works.

Shall we begin?

What is SeedSigner?

SeedSigner is an open-source hardware wallet project designed for securely storing Bitcoin. It operates without WiFi or Bluetooth connections, powered by an external battery or USB charger.

Launched in early 2021 as a DIY project, it can be assembled using inexpensive, readily available components. The focus is on using the Raspberry Pi Zero 1.3, which is very affordable.

SeedSigner allows users to sign transactions without connecting the device to a computer or mobile phone.

This method of signing is known as “air-gapped” because it enables you to confirm transactions to the Bitcoin network without any physical device connections. All interactions occur through QR Codes using the SeedSigner camera or even with an SD card.

Since it’s an air-gapped wallet, the device remains disconnected from any network, including the Internet. This isolation provides heightened security against cyberattacks and shields against potentially unsafe networks that could intercept transactions.

In essence, this air-gapped bitcoin wallet offers robust security features for signing Bitcoin transactions and supports multisig (multiple signatures) transactions. While it provides significant security benefits, additional precautions are always advised.

In summary, the goal of SeedSigner is to be a secure wallet for:

1. Generating and storing private keys;
2. Securely signing transactions via animated QR Codes or SD Card, reducing attack possibilities;
3. Being an open-source wallet that the community can verify openly and transparently;
4. Offering great cost-effectiveness.

Main features of the SeedSigner Wallet

As we’ve discussed, the SeedSigner isn’t just a build-it-yourself device offering more autonomy; it also boasts a variety of powerful features:

• Calculates 12/24 words for a BIP39 seed phrase
• Creates a BIP39 seed using D6 dice rolls
• Creates a BIP39 seed with entropy from a digital photo
• Guided interface for manually creating a SeedQR for storage/input
• Support for BIP39 passphrase/word 25
• Native Segwit Multisig XPUB generation with QR display
• Scans and analyzes animated QR transaction data
• Signs transactions and transfers XPUB data using animated QR codes
• User settings with optional persistence
• MicroSD card can be removed after software loading
• Live view during photo-to-seed and QR scanning UX
• Optimized seed phrase input interface
• Support for Bitcoin Mainnet, Testnet, and Regtest
• Support for user-defined custom derivation paths
• Derives indexed child BIP85 seed phrases
• On-demand receive/change address verification
• User-configurable QR code density and display brightness
• Responsive, event-driven user interface

Advantages and Disadvantages of SeedSigner

SeedSigner has several advantages, such as:

• Air-gapped (no WiFi/Bluetooth), reducing attack vectors;
• Low construction cost, making the device accessible to more people in more parts of the world;
• Use with multiple seeds and/or multiple wallets;
• Completely free and open-source software architecture allows independent construction from source;
• Use of non-Bitcoin-specific hardware, enhancing user privacy.

However, despite significant advantages, it has some areas for improvement, acknowledged by the developers themselves, such as:

Direct access to seed phrases:

This means that with the device in hand, seeds can be extracted from it. Therefore, it’s essential to take good care of both the device and the seeds. After all, a Raspberry Pi does not have chips like the “secret element” that other devices possess to prevent seed access through the physical device.

Trusting a single device to store multiple keys:

If a single device is used to store all keys in a multisig setup, this factor could become an easy attack vector, as any failure in this single component could compromise the entire setup.

Complete installation via Linux has a larger attack surface:

It becomes easier for malicious code to be inserted during installation.

How does SeedSigner work?

To operate this hardware wallet, you’ll need a specific model of the single-board computer: the Raspberry Pi Zero version 1.3.

This model is chosen specifically because it lacks Wi-Fi or Bluetooth capabilities, crucial for maintaining the air-gapped status of the device. The absence of these wireless modules ensures that private keys remain secure and never exposed.

The communication between SeedSigner and your chosen wallet software occurs via QR Codes. These QR Codes are mutually recognized and verified by both systems during a transaction.

Here’s how it works: Transaction information is displayed on your computer or mobile phone in the form of a QR Code. You simply scan this QR Code using SeedSigner’s camera.

Once the information is captured, it appears on SeedSigner’s display for confirmation. You then verify the details on the screen.

After that, it checks that it holds the correct keys to authorize the transaction. Subsequently, a new QR Code is generated on SeedSigner’s screen. You scan this new QR Code with your computer or mobile phone camera to sign the transaction.

Here are some wallets that are compatible with SeedSigner:

• Specter
• Sparrow
• Blue Wallet
• Nunchuck
• BitcoinKeeper

A Do-It-Yourself Wallet!

SeedSigner is available either pre-assembled or as a kit from various recommended retailers. In the US, an unassembled kit typically costs around $80.

Here are some websites offering ready-to-use SeedSigner devices or kits for home assembly:

• EU/UK: GoBrrr, VULCAN, DIYNodes, BitcoinBrabant, Bitsaga
• USA/Canada: BTC Hardware Solutions
• Australia: HansMade

Given that the project is open-source, you also have the option to build the device from scratch by purchasing the parts separately. Below, we’ll detail the necessary equipment and the steps for configuration.

How to build and configure a SeedSigner from scratch

Now that you understand what SeedSigner is and how it works, it’s time to learn how to build and configure one yourself.

Don’t worry, even though it might sound technical, the process is actually quite straightforward.

The first step is to get the equipment needed to assemble your device. SeedSigner requires the following essential items:

• Raspberry Pi Zero (preferably v1.3, W also works)
• WaveShare 1.3-inch LCD Display with controls (must have a 240×240 pixel screen)
• Camera module compatible with Raspberry Pi Zero
• MicroSD card with at least 64MB capacity

You might have noticed an orange case in the picture above. While the case isn’t necessary for the device to function, there are many open-source 3D printable designs available for free download if you want to give your device a finished look.

Here are some 3D printable case designs.

Once you’ve collected all the parts, the next step is to download the free open-source software and load it onto the device’s SD card. Here are the software links compatible with each Raspberry model:

Finally, to write the software to your memory card, you can use applications like Balena Etcher or Raspberry Pi Imager.

Alright! With your device now assembled and configured, you’re ready to start using your SeedSigner to manage Bitcoin transactions securely.

Using SeedSigner with Sparrow

In this example, we’ll follow the recommendation from SeedSigner’s website and use the Bitcoin Testnet, which is a test network that ensures no real satoshis are risked in this process.

We’ll be using the Sparrow wallet, which is compatible with SeedSigner and supports the Testnet network. You can get Testnet coins here.  

With your SeedSigner, go to the main menu and navigate to:  

• Seeds > Create a seed > New seed (first option with the camera icon) > click joystick > refilm | accept

After choosing the length of your seed phrase, a screen will display your 12 or 24-word seed, which represents the private key you just created.  

Write down these words and verify the accuracy of what you copied using the “Verify Backup” option.  

Select the “Done” option to export your private key as a Seed QR. Begin the transcription process by following these steps:

• Backup Seed > Export as Seed QR > Select the desired format.

Since we’re creating a 2-of-3 multisig wallet, you’ll need to create three private keys. Repeat the process above for each key and securely save your private keys.

After that, let’s configure the Sparrow wallet, using the Testnet network.  

To do this, open your Sparrow wallet and navigate to File > New Wallet:

Now, name your wallet and then select the “Multi Signature” option:

Once selected, the “Cosigners” option will allow you to set how many signatures your wallet will require. Just below, the “Keystores” section will show the number of wallets needed for each signature.

Go to “Keystore 1”, click on the “Air-gapped Hardware Wallet” option, and select SeedSigner:

Return to your SeedSigner and select the Testnet network option:

• Settings > Advanced > Bitcoin Network > Testnet.

Then proceed to:

• Seed > select your seed > Export Xpub > Multisig > Native Segwit > Sparrow > Export Xpub:

Now, just return to your Sparrow wallet, click the “scan” button next to the SeedSigner option, and scan the QR Code with your computer camera:

Done! The QR Code was scanned into Sparrow, and the “keystore 1” option appeared as “SeedSigner.” Public key information will be displayed on the Sparrow screen.

Just repeat this process two more times to create your 2-of-3 multisig.  

Once done, click the “Apply” button and set an access password for your wallet:

Done! Your SeedSigner with Sparrow is configured!

Easy, right?

Conclusion

As we’ve seen throughout this article, SeedSigner offers a simple, powerful, and relatively inexpensive alternative to traditional hardware wallets. Anyone with the right components can build their own device, providing a unique opportunity for personal sovereignty and independence from wallet manufacturers.

While SeedSigner may not appeal to everyone—requiring a basic understanding of Bitcoin, transactions, and different types of signatures—it is an excellent choice for the more dedicated Bitcoiners who relish the idea of constructing their own wallet.

I hope you found this article informative and engaging, and don’t forget to share it with friends.  

Until next time, and Opt Out!

The post SeedSigner: A DIY and Air-Gapped Bitcoin Wallet appeared first on Area Bitcoin.

If you’re a frequent Bitcoin user or plan to become one, Sparrow Wallet offers features that can help you fully explore what you can do with your BTC and transactions.

Lately, it’s been gaining popularity for UTXO management and consolidation.

Let’s dive into Sparrow Wallet and its features!

What is Sparrow Wallet?

Sparrow is a Bitcoin wallet designed for users seeking complete sovereignty, with a strong emphasis on multi-signatures and privacy.

According to Github, it was created in 2020 by developer Craig Raw to address gaps he noticed in existing wallets.

The wallet prioritizes security and privacy. As a non-custodial desktop wallet, Sparrow requires no personal information for use and gives you full control over your private keys.

It’s also open-source, allowing users to verify the code and even replicate it for similar projects.

Main features of Sparrow Wallet:

• Full support for both single-signature and multi-signature (multisig) wallets.
• Multiple connection options, including public servers, Bitcoin Core, and private Electrum servers.
• Standards-based, with complete support for PSBT (partially signed Bitcoin transactions).
• Compatibility with all common hardware wallets, supporting both USB and air-gapped modes.
• Comprehensive coin control, including full control over fees and detailed coin selection.
• Transaction labeling for all inputs, outputs (UTXOs), and transactions.
• Lightweight software compatible with multiple platforms.
• Ability to send and receive via PayNyms, both directly (BIP47) and collaboratively.
• Built with Tor integration.
• Support for testnet, regtest, and signet networks.

How does Sparrow work?

Sparrow Wallet functions as a hot wallet for Bitcoin, allowing users to securely and privately store, send, and receive bitcoins.

With a comprehensive transaction editor, Sparrow also acts as your own block explorer, similar to Mempool.

This feature allows you to edit all transaction fields and verify transaction bytes before broadcasting, giving you greater control over transaction size and required fees.

Sparrow also lets you verify which UTXOs are being used in a transaction and select the ones you want to use, making UTXO consolidation easier.

What does consolidating UTXOs mean?

Consolidating UTXOs means grouping smaller UTXOs into a larger one, saving on transaction fees. 

As a desktop wallet, it can be used on a separate and offline machine, ensuring more privacy.

Although it may seem complex due to its advanced features, it’s easy to get started: just download it on your computer, create your wallet through the application, or connect it directly to your hardware wallet.

Sparrow is a lightweight wallet. Instead of relying on SPV technology, designed to work in a simplified way and without downloading all data from the blockchain, it uses its own node directly or through an Electrum server.

What does an Electrum server do?

An Electrum server maintains a complete index of all Bitcoin transactions, enabling Sparrow to offer instant startup and immediate access to transaction history. Users also have the option to connect to their own Bitcoin Core node.

For beginners, Sparrow provides a list of pre-configured public servers, catering to those who value privacy but are not yet familiar with the tech details.

UTXO Management and Coinjoin

One of Sparrow’s key advantages is its ability to let users manage their UTXOs and perform CoinJoin transactions directly within the app.

UTXO Management

UTXOs (Unspent Transaction Outputs) are the unspent outputs in your wallet. For example, if you receive several satoshis that add up to 1 BTC in your wallet, each received transaction is a UTXO.

When you need to send 1 BTC to someone else, these UTXOs combine to form the transaction balance.

In most wallets, the software automatically selects the UTXOs used to compose the balance for a transaction. However, in Sparrow, the user can select which UTXOs to use.

And, as we have already seen, you can also consolidate UTXOs, particularly recommended in scenarios where Bitcoin network fees are high. 

Imagine you have many small-value UTXOs. When you make a transaction, these UTXOs will be grouped together, making the transaction larger and, therefore, more expensive.

By consolidating UTXOs, you can merge them into a single UTXO, helping to minimize fees in high-cost scenarios.

Coinjoin

Another interesting feature of Sparrow is CoinJoin, or coin mixing. It essentially involves mixing your coins to make them untraceable, ensuring greater privacy for your BTC.

Sparrow previously used Samourai Whirlpool for coin mixing. However, since the wallet was discontinued, Sparrow now uses PayNym.

This implementation with PayNym offers a high level of anonymity, and each Whirlpool mixing round provides the following guarantees:

• Maximum entropy;
• Never mixing coins with your own in different sessions;
• Never mixing coins previously seen;
• No deterministic links between inputs and outputs;
• No address reuse.

The wallet also allows coin mixing with cold wallets and via terminal.

What is PayNym?

PayNym is a feature in Sparrow that enables private and non-interactive Bitcoin transactions, eliminating the need to request a new address from the recipient for each transaction.

It works with a unique identifier, similar to an xpub, but without revealing any information about the wallet. This code is then converted into a user-friendly name and visually associated with a unique avatar.

Once a PayNym is linked, Sparrow creates exclusive send and receive addresses, ensuring private transactions for its users.

Quick guide on how to use Sparrow Wallet

Sparrow is not a web-based wallet, so you’ll need to download it onto your computer. Download it from here and select the version corresponding to your operating system.

After downloading, it’s essential to verify the application to ensure you have the original and updated version. Instructions for verification are available on the download page.

Open the application, and it will ask if you want to access it offline or online. Offline access is ideal for verifying wallet addresses and signing transactions and messages.

There are 3 ways to connect Sparrow to the Bitcoin blockchain, identifiable by color:

• yellow,
• green,
• and blue.

However, connecting to a public server shares your public keys. This is not recommended for large amounts but is reasonable for starting to use the wallet.

1. After completing the initial setup, configure the server. Once you have chosen the server, click on “Create New Wallet“:

2. Enter a name for your first Sparrow wallet and click “New Wallet”:

3. Then, select your wallet settings:

• Policy Type: Single signature or multi-signature.
• Script Type: Bitcoin script type (Native Segwit, Nested Segwit, etc.).
• Keystores: Details of public and private keys known by your wallet.

Start with the default setup by selecting “new or imported software wallet” (choose the corresponding option if you have a hardware wallet or want to set up a watch-only wallet).

4. Now, you must select the number of words for your private key (12, 15, 18, 21, or 24):

5. Choose the desired number of words (e.g., 12 words), and your keys will be displayed. 

Click “confirm backup,” re-enter your words, and click “Import Keystore.”

6. Click “Apply” and set a password for your wallet.

7. Your wallet is now ready for use and will be displayed like this:

How to create a multisig wallet in Sparrow?

Creating a multisig wallet in Sparrow is straightforward. Follow these steps:

1. Click “File” and select “New Wallet,” then choose a name for your wallet.
2. Click “Create Wallet,” and the wallet settings options will appear.
3. Select “Multi-Signature” and specify the number of desired signatures.
4. Add wallets by creating new ones or importing existing ones.
5. Select “Native Segwit” in the Script Type and click “Apply.”

Your multisig wallet is now created!

Creating a transaction and selecting your UTXO

Receiving a transaction is simple: just click “Receive” on the left sidebar and copy your address. Sending, however, requires a few additional steps.

Sending a transaction in Sparrow:

• Go to the “send” tab, paste the recipient’s address, and label your transaction. Enter the amount and adjust the fee if desired.

• Click “Create Transaction,” and a screen with transaction details will appear. Advanced details can be viewed in the right sidebar, recommended for more technical users.

• Your UTXOs will be selected automatically. If you want to change the UTXOs used, configure them in the UTXOs tab before finalizing the transaction.

Conclusion

Sparrow Wallet offers extensive resources for users to maximize security and privacy.

Despite being complete and having features that require greater technical knowledge, it is accessible to beginners without much difficulty.

In addition, it is important to recognize that this type of wallet may not be everyone’s preference, and you do not necessarily need to use it if you are now arriving in the Bitcoin universe.

However, it is important to know that there are wallets designed to meet an important demand of users who value security and privacy. It is also important to remember that you should always back up your private keys.

After all, in wallets that give you sovereignty, such as Sparrow, you can never be too careful since you are responsible for all the details of your BTC and transactions.

We hope you enjoyed this article.

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The Bitcoin industry recognizes this as a point of interest and importance for users. It’s no surprise that the market for Bitcoin-only wallets has been growing recently. By saying that, one of the latest releases is BitKey, a Bitcoin hardware wallet created by a company founded by former Twitter CEO Jack Dorsey.

In this article, we will learn more about BitKey, its functionalities, and characteristics.

Come with me!

What is BitKey?

BitKey is a cold storage hardware wallet developed by Block, a global technology company focused on financial services.

Block is led by former Twitter CEO Jack Dorsey and includes Square, Cash App, TIDAL, and TBD. The group’s goal is to build tools that enable more people to access the economy.

How did BitKey originate?

Dorsey left his position as CEO of Twitter in 2021 specifically to focus on Bitcoin-related projects, which he considers the most important work of his life.

Therefore, shortly after stepping down as Twitter CEO, Jack Dorsey announced in June 2021 that Block was developing a Bitcoin wallet.

In December 2023, BitKey was officially launched in 95 countries and began shipping to users in March 2024.

Hexagonal Shape

BitKey stands out with its hexagonal shape, quite different from other hardware wallets on the market, and it lacks a screen to confirm information.

The device, named “Rocky,” includes a fingerprint reader and a USB-C port for charging. But don’t worry about that now; we’ll explain everything later.

Additionally, BitKey is not just a physical device; there is also a mobile app and a set of recovery tools in case the user loses the phone, the physical wallet, or both.

Cool, right?

In the box, besides the device, there is a guide and a USB cable for charging it.

How does BitKey work?

BitKey operates as a cold storage self-custody wallet, meaning users retain possession of their private keys, which are necessary to move their bitcoins.

As a result, the company that developed the wallet does not store any user information and cannot access users’ balances.

Furthermore, this cold storage wallet includes a physical device, a mobile app, and recovery tools in case the user loses access to the app or the physical wallet. With these features, the wallet aims to be user-friendly for both beginners and advanced bitcoiners.

Let’s explore its main features.

1. Open source software and hardware

BitKey’s code is open source and licensed under the Commons Clause, which restricts the use of BitKey code to projects that do not offer a paid commercial product or service. The code is accessible on GitHub.

The wallet being open source means that anyone can audit BitKey’s code to understand how it operates and confirm that it doesn’t include features that would allow Block to control clients’ funds. It also allows users to identify and report security vulnerabilities.

These are important attributes and characteristics for any self-custody wallet and represent a significant advantage for BitKey.

2. Send and receive Bitcoin On-Chain

BitKey is a Bitcoin-only wallet, meaning it does not support other currencies. This focus enhances security and concentrates on the essentials.

With BitKey, you can send and receive bitcoins to and from any other address. The wallet’s intuitive interface simplifies transaction management, allowing users to select the transfer fee based on the urgency of the transaction: priority, normal, or slow.

3. Custom spending limit

In the BitKey app, users can set a daily spending limit for Bitcoin. This security feature is particularly useful as it helps control and protect fund usage.

By establishing a daily spending limit, users can prevent unwanted or excessive transactions, adding an extra layer of protection to their financial activities.

4. Multisig system

BitKey does not provide a seed phrase—those 12 or 24 words. Instead, the wallet utilizes a multi-signature setup with a 2-of-3 system, eliminating the need for long and complicated seed phrases.

Two keys are provided to the user. One remains in the mobile app for transaction and security management, while the other is stored offline on the physical device. This extra key enhances security and acts as a recovery option if the mobile device is lost.

Additionally, a third key is held by the BitKey developer company. This key facilitates ongoing mobile transactions and offers a fail-safe recovery option in case the physical device is lost.

With the 2-of-3 system, the company cannot move any funds without the user’s consent.

5. Fingerprint sensor

A unique feature of the BitKey physical wallet is its lack of an interactive screen or buttons, except for a single button used for fingerprint authentication.

The wallet is designed this way because all interactions between the physical device and the mobile app occur via NFC.

Additionally, the sensor allows you to store up to three fingerprints on the wallet, enabling access for another person or different fingers. This feature lets you enhance the security of your wallet by registering multiple fingerprints.

But, what is NFC?

NFC (Near Field Communication) is a short-range wireless communication technology that allows for the exchange of data between devices in close proximity, typically within about 4 centimeters.

It evolved from RFID (Radio Frequency Identification) technology and is commonly used in smartphones, credit cards, public transport tickets, and other electronic devices.

Therefore, to access the balance protected by the hardware, the user simply needs to unlock the device with their fingerprint and bring it close to their phone.

Since the device and the app connect via this technology, there is no need to connect the device to a computer. This avoids potential exposure to viruses that could compromise the wallet.

Isn’t it amazing?

7. NFC Chip for transfer between app and wallet

Using the NFC chip to pair the hardware with the app introduces another convenience: simplified balance transfers between devices.

8. Mobile app recovery

If your phone is lost, stolen, or damaged, simply download the BitKey app on a new phone and log into your cloud account via Google Drive or iCloud.

Once you’ve logged into your cloud account, unlock your hardware wallet and bring it close to the new phone. This action will unlock the encrypted mobile key backup and allow you to recover your wallet on the new device.

9. Hardware wallet recovery

Now, if the hardware device is lost, stolen, or damaged, you’ll need to initiate the recovery process through the app, which triggers a 7-day security waiting period.

During this period, you’ll receive security notifications via SMS or email to confirm that you initiated the hardware recovery.

After the security waiting period concludes, you can set up a new BitKey hardware device, pair it with your phone, and transfer your wallet balance to the new keys.

Alternatively, you can expedite the process using trusted contacts.

10. Trusted contacts

Trusted contacts are set up in the app when you first configure your BitKey. These contacts must download the BitKey app and agree to help you access your funds if you lose your wallet.

11. Recovery without the app and BitKey device

But, don’t worry! If you lose both your phone and the hardware device, there’s still a way to recover your assets!

Simply download the BitKey app on a new phone and share a verification code with your trusted contacts to confirm your identity.

Once verified, you can recover your encrypted cloud key and proceed to replace your hardware device.

Partnership with Coinbase and Cash App

In 2023, BitKey announced a partnership with two major platforms, Coinbase and Cash App. This collaboration enables users to purchase Bitcoin directly through BitKey, with the balance automatically transferring to the user’s self-custody.

To use this feature, users must either create an account or log into an existing account on Coinbase or Cash App. This is facilitated through an integration within the app.

This functionality allows BitKey users to buy Bitcoin and immediately initiate the transfer to their BitKey from Coinbase in various global markets, including the US, Canada, UK, Brazil, and Australia.

Additionally, users in the US can perform the same operation from Cash App.

Where to buy BitKey and what is its price?

Currently, BitKey is available exclusively through the official website, with delivery options to over 95 countries.

The BitKey wallet is priced at $150, plus applicable taxes, shipping, and duties. Be mindful of additional costs and delivery times, as these may vary by country.

Pros and cons of the BitKey

As we’ve explored in this article, BitKey introduces features not previously seen in other Bitcoin wallets. However, like everything in life, it comes with its pros and cons.

Cons

1. A significant concern with BitKey is the dependency users develop on Block during the recovery and backup of funds. With the multi-signature system, one of the three keys is kept on Block’s server, and the methods for recovering the app or device are also tied to their server.
2. The device lacks a display, which underscores the need for users to trust Block, as keys are not visible on any screen for verification.
3. Another drawback is the wallet’s lack of interoperability. Typically, when purchasing a hardware wallet, users can employ third-party software if they distrust the wallet’s server. With BitKey, this option is unavailable; users are limited to Block’s server.
4. There is no integration with the Lightning network. While other hardware wallets also lack this feature, Block could have distinguished itself by supporting the Lightning network.

Pros

Despite the concerns noted earlier, BitKey excels in other aspects:

1. The integration with partner companies for purchasing Bitcoin and automatically transferring it to the wallet simplifies the process of maintaining self-custody. However, users should be aware that this feature could leave traces, potentially reducing privacy.
2. BitKey offers a variety of recovery options, which is quite distinct from other wallets on the market. This provides greater peace of mind for users who are often concerned about losing their funds. The multisig system employed by BitKey adds multiple layers of security, enabling users to recover their wallet effectively. Therefore, you would only lose your funds if you failed to add trusted contacts, lost your phone, forgot your iCloud/Google password, and lost the hardware wallet—all at the same time.

How to recover balances if Block ceases to exist?

Since BitKey operates with a 2-of-3 multisig system, you need two of the following to maintain or recover control of your funds:

• Mobile key – A key stored in the BitKey app on your phone.
• Hardware key – A key stored in the hardware wallet device.
• Server key – A key stored on a server operated by Block Inc.

If you lose the second key and the third key, which is managed by Block, becomes unavailable, you will lose the ability to spend and move your balance.

To prevent this scenario, it’s crucial to have a backup of the hardware key, know how to configure another application (another wallet) with 2-of-3 multisig, and possess any other relevant information, such as derivation paths.

Conclusion

BitKey was created and designed to offer a simple and user-friendly solution, primarily aimed at less technical users, introducing new wallet recovery options.

However, given the significant reliance on Block’s servers, it’s important to consider that this might not be the ideal wallet for storing large amounts of Bitcoin.

I hope this article has given you a better understanding of Jack Dorsey’s latest innovation for Bitcoin.

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The post BitKey: A Self-Custody Bitcoin Hardware Wallet appeared first on Area Bitcoin.