What are the most common mistakes made when Setting Up an offline wallet.

[NefiSwap]

A common mistake happens on day one, when the coins first leave the exchange. Do a full round trip with a small amount before moving the real balance: withdraw a little to the new wallet, then sign a transaction on the air-gapped machine and spend it back out. That tests the whole unsigned/signed transfer you described while the stakes are tiny. Also check the receiving address on the signing device itself rather than on the online watch-only wallet, since the online machine is the one malware can tamper with.

[Cookdata]

Are you really asking this? Even your seed phrase, if possible you should divide them into separate locations. Moreover, the passphrase is something you created yourself which is just like your phone password. If I may ask, do you write your phone password somewhere? I think No. So it's not necessary to write down your passphrase because I think you should create something that you'll easily remember and hard for others to guess but you shouldn't create something difficult that you'll have to write it down. It's possible for someone to have access to somewhere you wrote the seed phrase but they can't have access to something in your memory.

I don't think a wallet set up should warrant different locations. I'm actually worried how a person that want a safe locations in many places. You can't measure the all the places to have the same security. Like your house can be safe for you to hide your seed phrase because you live there, you do almost everything in that place, but certainly the rest of the location can't be the same. The rest of the locations will be on assumption that itself which is bad for security.

Complicating a wallet security that should have been simple will lead you into another puzzle you may not be able to solve. Maybe you should learn to save your seed phrase in one location where only you can access or if you don't stay at home, like you travel alot, divide it into two, keep half at your home and take the half with you and a passphrase. This way even if you are not at home, you know the rest of the seed and the extension is with you.

[elda34b]

-snip-

i don't think that's what they mean tbh. by different location they meant something like storing on part on a book, another behind your safe, another one on your living room desk, and so on. obviously i might be wrong and he's referring to actual separation of location. sorry for the lack of capital, i'm typing from a device that somehow fail to register any shift or control input key.

[Faisal2202]

What about Multisig? Let's say I create one for myself and just like the example I dropped at the start of my post, do you think it's safe practice to have all recovery seed written down in the same location?

On one same book or steel or other?

You did not ask me , but my answer would be no, and that's obvious.

You should not write down the seed phrase in a single notebook. You should first encrypt it using an offline encryption method. Then write the output somewhere safe because that's the encrypted seed phrase words. Don't rely on online encryption tools ever because that's not safe. It's like handing your funds to them.

Use an offline encryption method, and then you can even write it down in the same notebook. I have some other ideas which I think can work for me but won't share here, but you can learn from that guy who stole funds and then hid the keys written on a small piece of paper inside the fishing rods haha.

[Merit.s]

Even your seed phrase, if possible you should divide them into separate locations. Moreover, the passphrase is something you created yourself which is just like your phone password. If I may ask, do you write your phone password somewhere? I think No. So it's not necessary to write down your passphrase because I think you should create something that you'll easily remember and hard for others to guess but you shouldn't create something difficult that you'll have to write it down. It's possible for someone to have access to somewhere you wrote the seed phrase but they can't have access to something in your memory.

It doesn't make sense to me that you should split up your seed phrase words and store them in separate location because you are increasing the risk of losing your seed phrase. The passphrase that you added is enough to keep your wallet safe. Just don't store your seed phrase and passphrase in the same location.

I don't like the idea of storing your passphrase in your memory because something might happen to you that can lead to you forgetting it. Password should be written down to avoid unnecessary loss because you know your phone password since you are using it every now and then doesn't mean that you can keep up to four different password in your head only if you are using one same password which is dangerous because if anyone has access to it, they have access to all your other accounts in different site and even your wallet.

Best practice is to use a strong passphrase with numbers, symbols and mix with capital and small letters. Write them down and keep them in different location separate from your seed phrase.

[Lontor]

Do you think it's safe to write down recovery seed and the passphrase in the same location? Like if I found a steel or card like paper then write down the recovery seed at the front then turn the back and write down the passphrase.

Do you think this method is safe? Can recovery seed and passphrase be in same location?

I see no problem with that. Also , keep a bakcup of both in another location.
Passphrase is important  to add randomness , in a situation like the coldcard incident

What about Multisig? Let's say I create one for myself and just like the example I dropped at the start of my post, do you think it's safe practice to have all recovery seed written down in the same location?

On one same book or steel or other?

No not in this case. Multisig is important when 2 parties need to confirm the transaction,  like you and your wife or you and your partner.

Too much trouble to create a multisig to one person control all keys

What if the person don't have a wife or partner? Is it better to then avoid Multisig? I was thinking that it's something I can do on my own but I get your point here, the only option left for someone who is all alone by themselves is going use recovery seed + Passphrase I guess.

Thanks for the response.

[elda34b]

What if the person don't have a wife or partner? Is it better to then avoid Multisig?

I personally don't think it's a big issue if you want to use the setup, just don't make your keys way to many to control (like 5 of 6 or something). Obviously your exact conditions will affect how you should setup your keys and backup. If you don't interact with anything online, use an air-gapped setup correctly, never tell anyone you're into crypto, not using multi-sig is more than fine.

[hd49728]

If you don't interact with anything online, use an air-gapped setup correctly, never tell anyone you're into crypto, not using multi-sig is more than fine.

You can interact with online things if your devices can be connected to Internet so with air gapped devices and air gapped wallets, for setting up, it's very first important steps to remove items that can connect them to internet.

[Guide] Secure air-gapped crypto wallet storage method.
If you don't feel enough with that setup, you can read a paranoid setup recommended here by LoyceV.

It's not too easy and simple as you think.

[Smartprofit]

You can set up a cold-key Bitcoin wallet using two devices (laptops, tablets, or smartphones). One of the devices, where you'll enter your seed phrase, must be completely isolated from the internet. 🙋

And here's where the questions arise! To install the Electrum app (or another similar Bitcoin wallet) on one of your devices, you'll need to connect that device to the internet once. This will allow you to download the Electrum app from the website. Is it risky? Yes, it is! Alternatively, you can transfer the file to the device using a flash drive, but there's still a risk of transmitting a virus (or Trojan) along with the file.

Furthermore, a device you carefully protect from the internet may already contain a Trojan. After all, you didn't create the device yourself, you bought it from a third-party seller. A smartphone can also potentially connect to different networks even in airplane mode. I'm not claiming this is possible.  The risk is probably small, but it can't be completely ruled out. Yes, I'm paranoid! 🤷

[L E G E N D A R Y]

-snip-

i don't think that's what they mean tbh. by different location they meant something like storing on part on a book, another behind your safe, another one on your living room desk, and so on. obviously i might be wrong and he's referring to actual separation of location. sorry for the lack of capital, i'm typing from a device that somehow fail to register any shift or control input key.

I think it’s better to leave it in separate locations rather than scattering it all over in one place, like in one house, in your bedroom, living room or safe. I saw a thread above where someone said flood swept his seed phrase away,  and that was simply because he had it in one location. Even if your seed phrase is scattered all over your house, it’ll make no difference when a flood, fire or a hurricane hits that house, everything would still be gone, but if it’s scattered and hidden safely in different locations, maybe in your grandparents house, that’ll make more sense, as long as you’re sure that you’ve kept it in a safe place. There’s no 100% guaranteed security measure for storing our seed phrase but at least we can try our best to be discreet when doing it and assume it’ll be safe.

[PrivacyG]

The most common mistake is probably getting too comfortable and lazy, which makes you skip some of the steps that seem like a waste of time but are actually very important.  Why remove the wireless components from a device when you can put it in to Airplane Mode, right?  Or.  Why should you bother verifying the Electrum install if it came from the official website any way.

You create a good offline, airgapped Wallet by caring.  Being lazy is not caring.

[X-ray]

Use an old laptop and remove the network card. Install electrum and sign transactions there. Just scan QR codes of signed transaction to broadcast the transactions in a phone/computer with internet access. Never insert a pendrive in this machine. Looks too much trouble for most people.

The removal of network module is the important part that newbie usually forget.

When repurposing a general computer for cold storage, we need to remove the wifi and bluetooth and complete install of new OS.

It's going to be a lot of work depends on whether the network modules are soldered to the board or not.

But disabling it just from the software side is not enough and still dangerous.

SeedSigner is better alternative than a repurposed linux box.

[SilverCryptoBullet]

The removal of network module is the important part that newbie usually forget.

When repurposing a general computer for cold storage, we need to remove the wifi and bluetooth and complete install of new OS.

It's going to be a lot of work depends on whether the network modules are soldered to the board or not.

There are many things to know and practice for setting up an air gapped computer.
How to Set Up a Bitcoin Air-Gap Computer?
The ultimate defense: What is an air gapped computer?

Computers—including Raspberry Pi and other single-board Linux computers—were not designed to hold secrets. Here is a short list of attacks:

An air gap removes a live network path. It does not prove that the computer, firmware, signing software, removable media, display, or output is trustworthy. Some examples below are observed campaigns; others are research demonstrations that begin with an already-compromised computer.

But disabling it just from the software side is not enough and still dangerous.

It's not how an air gapped computer must be set up.

[PERtua]

Are you really asking this? Even your seed phrase, if possible you should divide them into separate locations. Moreover, the passphrase is something you created yourself which is just like your phone password. If I may ask, do you write your phone password somewhere? I think No. So it's not necessary to write down your passphrase because I think you should create something that you'll easily remember and hard for others to guess but you shouldn't create something difficult that you'll have to write it down. It's possible for someone to have access to somewhere you wrote the seed phrase but they can't have access to something in your memory.

I don't think a wallet set up should warrant different locations. I'm actually worried how a person that want a safe locations in many places. You can't measure the all the places to have the same security. Like your house can be safe for you to hide your seed phrase because you live there, you do almost everything in that place, but certainly the rest of the location can't be the same. The rest of the locations will be on assumption that itself which is bad for security.

Complicating a wallet security that should have been simple will lead you into another puzzle you may not be able to solve. Maybe you should learn to save your seed phrase in one location where only you can access or if you don't stay at home, like you travel alot, divide it into two, keep half at your home and take the half with you and a passphrase. This way even if you are not at home, you know the rest of the seed and the extension is with you.

I do not think it's good to use only memory to store a passphrase. Although it may be simple to retain today, it might be difficult to recall later resulting in the loss of the funds forever. You should also have a secure backup to your passphrase as well. Ideally not the seed phrase. Security is all about protecting and making it recoverable. A recovery plan is indispensable for adding too many layers and creating risks. The objective should be to secure money. But not create the wallet recovery so complicated as it will be needless.

[Outhue]

For anyone that this could be useful for, don't say that because you are been told to create your wallet offline even with a hardware wallet then you can do it anywhere, don't create recovery seed and Passphrase in the public or even in a friend's house, my cousin's crypto wallet was drained few years back and the only explanation he had was he created it in a friend's place, I am guessing that they might have hidden camera installed without him knowing, avoid the public and generate crypto wallets only in your home, people hardly talk about this but it's the problem that made people lost their coins even after generating offline.

[crwth]

My experience with this, the first time, is that i have an old laptop that I reformatted and used it as an offline PC. I didn't want to connect or anything with it and the way I did that is that I used a flashdrive to make transactions and transfer and sign it on the air gapped laptop.

To make sure that I have installed the right software, I verified the cryptographic signature to it. Not just downloading it on the official website but making sure that you have managed to confirm it.

The most important approach would be to back up your wallet correctly and I think you will be fine.

[hmbdofficial]

OP I believe you will be fine using a Trezor wallet.
All you need to do is write down the recovery seed in a place far away from the internet.

I still believe that using a hardware wallet is the best way to avoid losing your digital assets, right now I would choose Trezor wallet or Keystone wallet.


Bitmover I have 2 question too

Do you think it's safe to write down recovery seed and the passphrase in the same location? Like if I found a steel or card like paper then write down the recovery seed at the front then turn the back and write down the passphrase.

Do you think this method is safe? Can recovery seed and passphrase be in same location?


There is one more.

What about Multisig? Let's say I create one for myself and just like the example I dropped at the start of my post, do you think it's safe practice to have all recovery seed written down in the same location?

On one same book or steel or other?

Logically you should be able to tell that writing down recovery seed and pass phrase on same location, like I mean on same metal plate is already defeating essence of having more than 2FA authentication, because if someone gets their hand on that plate, then the person will be able to access the wallet and the essence of having multi sig is defeated I guess.
The main reason for the passphrase was added security to the seed phrase, now written everything on one place is basically exposing that wallet. that’s how I see it.

[Catenaccio]

Logically you should be able to tell that writing down recovery seed and pass phrase on same location, like I mean on same metal plate is already defeating essence of having more than 2FA authentication, because if someone gets their hand on that plate, then the person will be able to access the wallet and the essence of having multi sig is defeated I guess.
The main reason for the passphrase was added security to the seed phrase, now written everything on one place is basically exposing that wallet. that’s how I see it.

Seed splitting is a bad idea.
Splitting wallet seed phrase and passphrase (extended phrase or custom words) can be a bad idea too if you lose one of two parts in the future, you won't be able to recover your wallet from only one part of the wallet backup.

Bitcoin non custodial wallets mostly don't need 2FA because technically, wallet passphrase is already a 2FA for non custodial wallets.
Like Electrum wallet, 2FA means you use a third party TrustedCoin but if you recover a wallet without that 2FA, you can disable 2FA and get a same wallet that can send coin fro you too.

[ElDorado_21]

It doesn't make sense to me that you should split up your seed phrase words and store them in separate location because you are increasing the risk of losing your seed phrase. The passphrase that you added is enough to keep your wallet safe. Just don't store your seed phrase and passphrase in the same location.

...

Best practice is to use a strong passphrase with numbers, symbols and mix with capital and small letters. Write them down and keep them in different location separate from your seed phrase.

No matter how you store your passphrases, you should always verify they work. There is no error when entering the wrong passphrase it will just result in an empty wallet. Verify that the first receiving address or fingerprint matches and also perform a small deposit and full recovery test. This is often due to case sensitivity and special characters being entered differently on different devices/keyboards.

What if the person don't have a wife or partner? Is it better to then avoid Multisig? I was thinking that it's something I can do on my own but I get your point here, the only option left for someone who is all alone by themselves is going use recovery seed + Passphrase I guess.

Multisig doesn't have to be a two party solution. It is quite common to have a single user multisig with a 2-of-3 setup. This provides protection against losing or compromising a single key. Something that no one has mentioned is backing up your wallet descriptor (or all the cosigner xpubs). You will need to backup your seeds but the seeds aren't enough to restore the wallet without knowing what script type, derivation paths and xpubs of the other cosigners.

And here's where the questions arise! To install the Electrum app (or another similar Bitcoin wallet) on one of your devices, you'll need to connect that device to the internet once. This will allow you to download the Electrum app from the website. Is it risky? Yes, it is! Alternatively, you can transfer the file to the device using a flash drive, but there's still a risk of transmitting a virus (or Trojan) along with the file.

You don't even have to plug your air-gap device into the internet! Download Electrum and the signature file (.asc) on another online computer. Put both onto a new USB stick and check the PGP signature on your offline computer. Obtain the public key of the developer from multiple sources. If you don't trust your laptop's internal storage, use a live USB to ensure you don't trust anything on the machine.

[bitbollo]

I would suggest to newbies a great protocol/guide on how to setup a safe cold wallet called glacierprotocol.
It's interesting to see the grade of attention required for this activity.  It's not just matter of tossing few dices, but it's something that could cost some time /efforts - it is not planned for an average joe.
but hey, did you want your economic freedom?  did you want rely on a third party product or setup everything by yourself?