I responded to a similar question yesterday on email. Here is the process in a nutshell:
Once the offline computer is setup here the steps:
- Copy the Bitcoin Armory installer for your offline operating system to a USB key and install it on the offline computer.
- Create a wallet on the offline computer.
- Print a backup. You can print a single page, or a fragmented backup to distribute to multiple secure places and people. With a fragmented backup you only need a "M-of-N" fragments to restore your wallet, you decide M and N. For example you can make a 3-of-5 fragmented backup that requires only 3 of the 5 fragments to restore your wallet.
- Delete and restore from the paper backup before you put any bitcoins into your wallet.
- Create a "watching only" copy of your offline wallet, put it on a USB key, and plug it into your online computer. Make sure your installation of Bitcoin Armory on the online computer has actually gone online before you put any bitcoins into your wallet.
- You can use the watching only copy of your wallet to receive bitcoins into your wallet that is offline.
- You may decide to keep an online wallet with a smaller amount of bitcoins in it to spend conveniently. Spending money from the offline wallet takes a few steps and involves a USB key. The USB key that you use to spend money from your offline wallet should only be used for that purpose. Ideally you should get a very small USB key that you won't be tempted to use for any other purpose. You can think of your offline wallet as your bank, and your online wallet as your pocket. For some people their offline wallet lives in a safety deposit box at the bank. For them using their offline wallet really involves going to the bank.
I'm planning a Google Hangout "On Air" (GHOA) to record a demo of the offline setup process. Anyone who has questions about how to install Bitcoin Armory offline is welcome to join the GHOA. Just send me a personal message.
I posted a youtube video of the very first step which is installing Ubuntu on an offline computer.
Check it our here:
http://www.youtube.com/watch?v=K42aZWYg9RgThis is a work in progress. Feel free to comment and ask questions in the comments on that video. I intend to respond to questions in a separate video, and depending on the feedback, I may take the first one down and redo it.
