Questions about Mycelium accounts

[yaya1]

Hello,

I use Mycelium wallet app for bitcoin and I wanted to ask: 

1. What is the difference between the "Add Account --> Single Address Account" and the "Cold Storage" options?

2. What should I use if I have a paper wallet that I want to spend?

Thanks a lot!

[nc50lc]

1. What is the difference between the "Add Account --> Single Address Account" and the "Cold Storage" options?

In Mycelium,
The former creates a random private key and use it to derive all three address types.
The private key remains in the device and the "SA account" will be saved in your account list.

While "Menu->Cold Storage" is temporary, you'll only use an existing private key or seed phrase in that session to send its funds.
After that session, the key will be deleted from the device.

[NeuroticFish]

Your question is not that clear. Mycelium wallet which is hierarchical deterministic (HD) wallet is not a single address wallet, its seed phrase generates master private key which generates child keys. The child keys generates the addresses. Not just an address.

The question is clear and correct. One can add a new account and one of the options is "Single Address", which then is lost between many other options; I'll get back to that.
You can add separate accounts to Mycelium, which are not HD wallets. Some options are importing a private key or an address (clearly last option makes it watch only).

The wallet tells about "Single Address":

Generate a new random key pair to use as BTC or BCH SA account.

If I do that, a single private key is randomly generated and for that 3 addresses are offered, one legacy, one SegWit compatible and one bech32.


I will add that these "accounts" are unrelated to the original HD account and some of them (I don't know the exact list) may not part of the Mycelium backup (!) when one does that.

[yaya1]

Thanks! 

So what should I use if I have a paper wallet that I want to spend ?
   

[NeuroticFish]

So what should I use if I have a paper wallet that I want to spend ?

I will start with telling that any device connected to internet is - to a certain degree - unsafe, hence I would not use Mycelium for the job if the paper wallet contains big money.

Option 1.
Now, if you still want to go on with Mycelium, you can try to import the private key either by scanning (add account -> advanced and more -> scan), either from clipboard (but you'll have ti write the private key into a notepad then copy it to clipboard and I really don't like using one more third party software) and then you can send those coins somewhere else (and since you should do this only with small funds if you do it with Mycelium, I'd say that it may be good to spend them all or send them all to a HD wallet you have the seed written).

Option 2.
I've looked up on the internet and you can go on the "Cold storage" path too, but I've never used it at all. If you search on the internet for "mycelium sweep paper wallet" you will find even YouTube movie explaining it (not mine, I cannot vouch for its accuracy).
But I've never used that so I can't tell; the difference should be minimal.

[nc50lc]

So what should I use if I have a paper wallet that I want to spend ?

It's the 'Cold Storage' option.
However it's not the safest option since exposing the private key to the internet to spend it isn't really 'cold storage'.
(read the warnings in the reply above).

Are you limited to mobile devices that's why you're inclined to use Mycelium?
Do you have access to a PC?

[BitMaxz]

If you want to spend your BTC from your paper backup you can use Electrum on your phone but like the above said it's risky if you import a private key into a device that you usually use for online activity.
You need an extra phone or PC if you want to make a safe transaction because one of your devices must be offline and never connect it to the internet and one is a watch-only wallet where you can able to make unsign raw transactions.

[yaya1]

Are you limited to mobile devices that's why you're inclined to use Mycelium?
Do you have access to a PC?

Yes I have also a PC. I use mycelium because its the only one I tried so far..

[BitMaxz]

Yes I have also a PC. I use mycelium because its the only one I tried so far..

Why not start using Electrum for Android phones instead? It's easy to use compared to mycelium the only difference is mycelium supports other altcoins but Electrum only supports Bitcoin.
Since you have a PC then you can choose which one you want to make your cold storage the mobile phone or the PC?

Take note make sure any of these devices should be disconnected or never connect to the internet. Cold storage should not have any connection data to the internet and only a QR code or USB flash drive is your way to transfer raw unsigned/signed transactions.

[nc50lc]

Are you limited to mobile devices that's why you're inclined to use Mycelium?
Do you have access to a PC?

Yes I have also a PC. I use mycelium because its the only one I tried so far..

Generally, it's safe even in Android as long as the device itself isn't compromised and the wallet isn't malicious.
If you can risk the amount and you're confident with your Android phone's security, do it.
But if you're dealing with huge amounts, it's best to proceed with caution.

If you're interested in Electrum cold storage, you can use your PC as "temporary" air-gap PC until you fully spent its funds.
Disconnect the PC's internet communication devices like WiFi, Bluetooth, LAN cables, etc.
And use your android phone as the online "watching only" wallet.

Download PC and Android Electrum from electrum.org/#download.
Transfer the files to the specific devices to install (recommended: verify their signature)

Setting the wallets is easy, in the offline PC Electrum, create a new imported wallet by selecting the option: "Import bitcoin addresses or private keys"
And type the private key there (you have to append the script type described in "?" if the address isn't legacy '1 address').
In the online Android Electrum, create a new wallet and select the same option but paste the address instead so it will be created as a 'watching only' wallet.
The balance should appear in the online watching only wallet.
With that you've created a cold-storage setup.

To spend it, create a transaction on the online Android Electrum, find a way to transfer the PSBT file to the offline PC (e.g. Flash drive or QR Code);
sign it using the offline PC, transfer the signed raw transaction back to the online Electrum and "broadcast" it.

Read these for the details, you can skip to the "create txn" part (the buttons are different due to the difference in versions):

• electrum.readthedocs.io/en/latest/coldstorage.html#create-an-unsigned-transaction
• bitcoinelectrum.com/creating-a-cold-storage-wallet-in-electrum/
  
  

After spending the funds completely (e.g.: sent to a hardware wallet/exchange) with 6 confirmations or more,
you can now use the offline PC normally since the private key there is now empty.

That was not totally cold-storage setup but it's a lot better than exposing the private key online.