Cold Storage without a (secure) printer

If you don't have access to a secure printer, or a printer at all, but still want to have a cold storage paper wallet, this how-to is for you.

A printer is considered insecure, if it's connected to a network or if it stores the print jobs in some internal memory. A general rule of thumb is, the dumber the printer is, the better. So a $30 ink jet is probably a better choice to create paper wallets, than a $300 all-in-one machine that receive e-mails, send faxes, etc.

(Side note: If you use an inkjet printer, it's prudent to laminate the paper wallets or protect them in some other way from moisture.)

What stuff you will need:

What knowledge you will need:

What will happen: You will create a Linux system on USB-drive-A. Then you will disconnect your computer from the network. Then you will start your computer from USB-drive-A into Linux. And then finally you will create a paper wallet.

Preparing the Linux system on USB-drive-A

First you have to download an image of a Linux distribution. Ideally, the Linux distribution comes with all the software you need to create the wallet. One of the more reputable options for that is Tails.

Go to the Tails website and follow the instructions to create a bootable installation on USB-drive-A.

Now unplug USB-drive-A, physically remove all network cables from your computer.

Restart the computer from USB-drive-A.

Once the computer started Tails, open the Electrum wallet and write the 12 word recovery seed on paper. Also write on it the wallet you used and the current date, like Electrum, November 28th, 2018.

And again, write the same seed again on another piece of paper like you did just now.

Store one of the papers with your other important documents, so nobody accidentally throws it away mistaking it for trash.

These 12 words are your bitcoin wallet. Whoever knows these 12 words, can get your bitcoins.

Store the other piece of paper with your seed in an envelope somewhere secure, like a bank safe deposit box, or hide it in the bookshelf in your grandma's house.

Notice: The seed should always exist in two places at the same time. Accidents happen, for example your house might burn down. If the only copy of the seed burns with the house, your bitcoins are gone.

Write on another piece of paper one or more of the addresses Electrum produces after initialization.

You can observe transactions to (and from) the addresses using

Access your bitcoins

First, do everything as before again. Make a new seed, write it down on two pieces of paper, write down one or more addresses it produces and store the paper backups of the seed in two secure, geographically distant places.

Now restart your computer again from the Linux USB system, but this time actually connect to the Internet. Start Electrum and restore from your old seed. After a short synchronization time, you should see your total balance.

Send the amount you wanted to send. Notice, that the remainder, the change, is sent to a change address within this wallet. Wait for a few confirmations and send the remaining balance to an address of your new seed, which is still cold, i.e. has never touched a device connected to the Internet.

Archive the old seed. Never throw a seed away.

As you can see, your seed and thus your funds, are still exposed to the Internet at least for a short period of time. You also have to do two transactions for every sending you actually intend to do. One to the actual recipient, the other to send the change amount to a new, cold, address.

To get totally cold storage, see the Electrum Cold Storage section.

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