Bitcoin Forum

Hi all, I created a cold wallet offline and then a watch only wallet for my online machine. I have 3 questions:

1. Can I use this watch only wallet to receive funds (from exchanges, other people, etc) by creating new addresses

2. Will those new addresses and funds be automatically transferred to the cold wallet?

3. If 1 and 2 is yes, can I also create a watch only wallet on my phone to generate new addresses when I need it?
• Funds from my phone's  wallet would sync with the other watch only wallet and be transferred to the cold wallet? That way, I don't need to wait until I have access to my online machine.


And in order to spend, I would need to export transaction from watch only wallet, sign it on the cold wallet, then load it online to send?  

Just want to make sure I am getting all my steps correct. Thanks!

Yes of you did it properly (you can check the xpubs match) then everything else is correct.

You have to understand firstly that Bitcoins are not transferred within wallets. Bitcoin is a ledger which keeps track of where the funds are transferred (at a very simplified level) but the correct answer would be UTXOs being spent and created.

Your watch only wallet is created with the master public key of the cold storage. This means that your watchonly wallet is essentially a mirror of your cold storage but it only has all of your public keys or rather your addresses. You can generate as many addresses as you'd like as there will be no deviation from your cold storage. You can test it out if you want and see that the addresses from your cold storage matches those from your online computer.

Funds are never transferred within wallets. The addresses that is shown in your watchonly wallet should correspond to those on your cold storage and your cold storage should also have the corresponding private keys needed.

Yes. You can use a QR code as a medium to transfer the data between the machines.

Provided you set up the watch only wallet using the master public key from your cold wallet, then yes, every address your watch only wallet creates will also be created by your cold wallet.

As ranochigo has explained, funds are not held in wallets, only keys are, but yes, any coins you send to an address on your watch only wallet will effectively be in cold storage, since the relevant private keys are only on your cold storage wallet.

Yes. You can create as many duplicates of your watch only wallet as you like. They will all stay up to date and synchronized provided they have an internet connection.

Yes. You will be able to use any one of your watch only wallets to do this.

Thank you all for the quick and detailed responses! So essentially, the offline wallet will never show any history or funds since it never connects to the internet. And is is not used unless I need to sign transactions to send. The watch only wallets are the ones that will show everything.

All correct.