Some important Non-custodial wallet features you should know

[Emjay24]

I have been using and playing around with some great features on my non-custodial wallet, Electrum to be precise, they're interesting to know and some can help us with our privacy practices. I decided to share with others for knowledge sake

NB: I am using Electrum for this, it might not necessarily be the same application to other non-custodial wallets

Using Electrum Through Tor
Tor is useful to enhance privacy, it hides your IP address and geographical locations from Electrum servers, it can help prevent surveillance and also add a layer of protection for you against malicious servers. The tradeoff is that it might be slower. To achieve better privacy, please run your own full node.

First you've to download Electrum and verify it's digital signatures, download original Electrum from https://electrum.org and verify its signatures.

How To connect Electrum to Tor
step1: Download original Tor browser by visiting https://torproject.org
step2: install and verify its digital signatures.
step3: Open the Tor browser, connect and Onionize your connection, then open the electrum browser and click on Tools>Network>proxy. Change the drop down to SOCKS5/TOR and use this configuration 127.0.0.1 for "host" and 9150 for "port", then click on "Detect Tor proxy". If connection is properly done, the connection indicator would turn from green to blue. Now you can continue using Electrum with tor and enjoy its privacy benefits.

There is yet another way to connect through Tor Which is easy as well

CoinControl feature
This is very important in managing UTXO  sets, you can choose the UTXO you want to spend and add it to Coin Control by simply right clicking on the UTXO and selecting "add to coin control", then your next spending would be from the selected UTXO sets.

Freezing UTXO sets
This is important when you do not want to spend some definite UTXO sets, and don't want to make any futuristic mistakes with it, you can freeze the UTXO sets to make them unavailable when you are spending from the wallet, You achieve this by right-clicking on the UTXO sets and selecting "Freeze". There are two types of freezing which includes Freeze coins and Freeze address. The difference is that when you select Freeze coin, only that particular UTXO set is frozen, while others still in the same address would be available for spending, but if you Freeze address, then every UTXO sets in that particular address is frozen. You'll need to repeat the process again to unfreeze the coins/address before it becomes available for spending again.

Customizable Transaction Fees
Electrum allows you to manually customize your fee rate to your preferred rate. You should understand that there is an acceptable fee rate that your transaction would be conformed by the miners at a time, if you go far below it, your transaction risks  staying in the mempool for longer and may be dropped or eventually confirmed at a later time. Electrum sets the fee rate by itself, but you can customize it how you want.

How to customize your fees
After you put in the address, description and amount to send, then you click on "pay". It brings you to the next view, then on that view click on tools dropdown and select Edit fees manually , then you can set your fees as you desire. You can still use this site to check the High, medium, low and no priority fees before setting yours manually.

Using Electrum as Watch only wallet
Watch only wallet is used to track transactions and balances on your wallet on an online device using your Master public key(xpub key). This is important if you want to be safe from social engineering because your private keys are not present on your watch only wallet, so funds cannot be stolen by an attacker, it provides a read-only view of transactions.

How to Setup watch only wallets
create a new wallet>standard wallet>Use a master key. Then proceed to your offline electrum wallet. click on wallet>information, a new window would be displayed, from where you can copy your Master public key, then copy it and go to the online wallet, paste and continue. You can create Partially signed transactions on the WOW, but before you can broadcast it, you still need the offline version to sign the transaction

Using Electrum as Cold Storage
Electrum can be used without wireless connection and best in an air gapped device and would be used primarily for signing transactions already created in an online version of Watch only wallet in another computer, air gapped devices are good because it is not prone to social engineering as long as you don't apply any wireless connection to it. You can also run electrum in tails OS from a USB flash connected to an air gapped PC is another good option since Electrum comes preinstalled in tails. Do not forget to store your seed phrases offline and securely for the retrieval of your wallet in later time

How to use cold storage in signing transactions
After creating the transaction in a Watch Only Wallet, copy it to a USB drive, then plug the drive in your cold storage device, and go to tools>load transaction and select the .psbt file on your USB stick and sign the transaction from your Electrum wallet, save back to the USB. After signing, the status changes to signed and the file extension becomes .txn. Take the signed transaction and back on your watch only wallet, click on tools>load transaction, select the signed .txn file and then broadcast.

Using Electrum With Hardware wallet
You can use Electrum cold storage with hardware wallet and instead of going ahead to create a new seed phrase, you can select "Use a hardware device", click next and Electrum scans and detects your device and you can use it for signing transactions with keys in the hardware wallet, through the Electrum software.

Pay to Many
Ever wondered how your campaign managers pay lots of participants at the same time? I did until I found out there is a pay to many option and in electrum, you click on send, use the tools dropdown on the far right and select pay to many.

Here is the format for Entering the details
You enter your list of outputs in the Pay to many field, each output is formatted as this:
[/list]

Code:

address,amount

so you can have

Code:

bc1qjfieopsjeeckdsga34rfgthyolygdjutpmdg63,0.003
bc1qjfieopsjeeckdsga34rfgthyolygdjutp77eydf,0.005
bc1qjfieopsjeeckdsga34rfgthyolygdj2hhyejufrt,0.103

Replace By Fee(RBF) and Child Pay for Parent(CPFP)
RBF is a scenario whereby you can bump the fees to an acceptable fee margin as a sender if you set it to a lower fee earlier and confirmation is delaying or you want conformation to be much faster and you increase the fee to high priority so as to attract the greedy miners to include your transaction faster in a block. Electrum offers it and you only need to select the tx, replace it with a new version with increased fee and rebroadcast again, you can choose to spend the UTXO to a different address or even spend it back to your wallet.

CPFP on the other hand allows you to increase the fee for an unspent transaction stuck in the mempool as a receiver and fast track its confirmation time by setting higher fee that would attract miners t include it faster in a block.

Multi signature wallets
This wallet is such that you create two separate wallets in two different machines that must be used together in other to have access to and spend funds. In it's creation, both must be created as Multi-signature wallets, it would reject the master public key of a standard wallet as a cosigner during its setup. Both wallet will have same addresses. This is a good choice for improved security and when two or more people/organizations want to collaborate and there is need for a joint custody of funds.

Spending funds from a mult-signature wallet
You can create a transaction from their watch only wallet which you must setup with both wallets xpub keys, then export to a USB drive and sign on each air-gapped device bearing the wallets before you can broadcast from the online version.

If you are not using a WOW, then you can create transaction from one of the wallets and send it to be signed as well from the other cosigner before it is broadcasted, but using a WOW and air gapped device for multi-signature wallets remains the best shot


This is only a few, I would be adding more to it as I increase my knowledge and experience. You can include yours with detailed explanation on how it is done and I will link it to the OP when it is verified. I would also appreciate if some of you that uses other good wallets as well like Blue wallet, e.t.c to describe how it is done there, so I can link it to the OP.

Contributions, observations and corrections are welcome.

[Doan9269]

It is important that we know that choosing a non-custodial wallet is very good, but much better expected of us is to ensure that we are using an open-source long-term custodial wallet, you also made some relevant information available for users that will help them learn more about the wallet.

Lastly, not only should we concentrate on the type of wallet we use for our bitcoin assets, but we must also see it as a necessity why we should protect our interest in the asset we are holding by knowing more about security and privacy, this is paramount and determines whether we lose or maintain our assets within our reach after investment has been made.

[Donk1]

True talk the discipline required in using a non-custodial wallet is very high, so as the risk, because one wrong move can actually attract scammers and hackers. That's why to me I believe learning and doing research is one major priority every bitcoin enthusiast must ensure because protecting our assets is our responsibility and the only way one can do that is true learning; that's why fundamental of knowledge acquired during research makes an individual more responsible ,the more you know about security and privacy the less likely a person is to make an irrational mistake that will cost he or she there life time of investment....

​That said every beginner should take note of this always verify that you are on the actual electrum.org site because believe it or not, there are many fake out there that looks exactly like the real and their plans are to are steal your seed phrase. So yeah that's all for me we should always be ahead when it comes to security measures.......