Video - Bitcoin 101 - Getting Your BTCs out of Your Paper Wallets and Cold Storage - Fun with Sloppy Wallets
Are your bitcoins stuck in cold storage or on your paper wallet? Sure those are both GREAT places to keep them, but how do you get them out? What does 'sweeping' mean? These ideas are the goal of this video. Hopefully by the end of these videos you will no longer be afraid to take your bitcoins out of the reaches of malware programmers.
TRANSCRIPT
Hello, this is James D'Angelo and welcome to the Bitcoin 101 Blackboard Series. Today we're going over how to get your money out of paper wallets and cold storage.
Again, they're really two of the same things. Both paper wallets and cold storage are a way of storing your private keys in some way that it's not online. In fact, the best way to do it is to actually generate these on a computer that never goes online and print up your private keys from there. And then you can send your public address right, if you have a public address on here, if you have the public address somewhere and you could send to it as long as you. Then you can keep this in your safe deposit box or in a library book or somewhere.
So most of the time when you're dealing with your Bitcoin you're going to be dealing with this public address, right. You may put that out there for someone to send you some money. This is your public address which you can share to anyone. Remember this is a one-way code. If someone sends Bitcoin to that they can't take it out. You can never take money out with just this public address. So for today what you really need is the other thing.
The most important one which is your private key. And your private key usually looks something like this one right here below. It will start with a five and will be even longer than your public address. And remember your public address generally is going to start with a one unless it's sort of a multi-sig sort of weird transaction it will have a one at the beginning. So that's one way to tell them apart.
Now what we're going to do today is we're going take this private key and this is actually the same private key that I have here on the paper wallet and the same one that I have in cold storage. And we're going to take them out of cold storage entirely, put them online and we're going to send the funds out. So how do we do this. Well, it's actually very, very easy. Okay. So we're going to go online here and we're going to go to the site we talked about in the previous video, blockchain.info.
Here's blockchain.info and it got a number of great features. It's a great, great website and we're going to go over here to the six columns and we're going to click on wallet. And what we're going to do is we're going to start a brand-new wallet. And it's actually the best way to take your money off of cold storage to start a brand-new wallet because blockchain.info and a bunch of other wallets it's not always clear. So see you've got $20 in your old wallet and you bring in five new dollars. Well, you're not really sure when you're spending if you're spending from one or the other. It's hard to select which addresses you're spending from.
So you may not understand that but I highly recommend for the first few times you do it you create a brand new wallet to take your funds out of your cold storage and your paper wallet. And remember hopefully you're using sloppy wallets. Okay. Wallets which have very small amounts in it because you really want to get used to this process. Do not be doing lots and lots of Bitcoins in these transactions when you're learning this. Okay. Used 10 cents at a time. So here we go.
We're going to go over here and we're going to say start a new wallet. So I'm going to do my address here, World Bitcoin Network. Type in my password I use for all my sloppy wallets and then I'm going to go and try and recognize this thing and I'm going to hit continue. Now your wallets been created successfully. If you forget the details the phrase below can be used to recover everything. This monkey some got anteater syndicate digital, it’s one way to recover your wallet. So you might want to copy that and since I use sloppy wallets I'm going to copy that and just stick that on my desktop.
Do not save Mnemonic on your PC or in your email drafts, write it down or print it unless you're creating sloppy wallets. You want to leave them all over the place so if people find these private keys in this mnemonic and they drain funds from it well, then you're learning that people are coming after your stuff. One thing I love to do is leave private keys all over my computer or leave paper wallets all around my house and then add them all up into one watching wallet. And if the value is going down I know that someone is coming after my stuff. That's called sloppy. Very handy things to have.
So do not save the mnemonic on your PC or in your email drafts, write it down or printed if you're dealing with large sums of Bitcoin. Anything more than $20 you probably want to store it somewhere else. And remember yes, people can break in your house and they can come get your paper wallet. You can put this into a safe deposit box but for every person who's coming to break in your house and looking for your paper wallet there's probably 20 million malware software hackers attacking your computer looking for Bitcoin keys.
So the whole idea remember of cold storage and these are both forms of cold storage is to get your private keys with your real balances of Bitcoins off your computer entirely. Okay. Let's continue. Without the mnemonic we can't recover your password right. Blockchain.info doesn't save your passwords on their site. This is all client-side stuff, not server side stuff. But we're going to say continue. And now I've got my new wallet, right. I will go in here and I will type in and my password. Wala! I've got a zero-balance wallet. Perfect for taking stuff off of cold storage.
Now I've got to set this up some way so that I can put the funds here. So somehow, I'm going to get my Bitcoin from this piece of paper or even a brain wallet or this USB drive into here. And the way to do that is to go to the fifth column over here import, export. This is importing and exporting private keys. And we're going to click on that and of course they give you their whole spill about it. You can read through that but we know what we're doing, we're going through. And this is also where you can set a watching wallet, great, great features to have watching wallets for all your sloppy wallet you can put all the public addresses here and you watch them all at once.
So you could have 30 sloppy wallets all being watched in one blockchain.info wallet. But that's not where we're going. We're going over here to import a private key. So now my big problem is I've got to get it from this piece of paper into this column down here where it says private key. Well, I could start typing. So here I've got five K I, well, gosh, this is a sloppy wallet so I don't want to spend so much time doing that so I actually go over here to QR Journal, this free little software you can download for your Macintosh. I'm sure there's some for the PC's. And there you see me down there. That's my computer's camera and again you don't want to be doing this with real Bitcoin amounts because cameras talk to the Internet all that stuff. All right. But here we go.
We're going to hold up our secret private code there and bam! The thing recognizes it right away. So there's my private key down here and I can just look to make sure it's the same here. Yeah. It looks about the same. You'll know when you put it in and your funds are there, right. So I'm going to say close. I'm going to go back to my blockchain wallet, import private key and I'm just going to paste that there. So add private key. And of course that's the same thing you'd be doing with your cold storage. You would have your private key in some way on here and you just copy and paste it right in.
Well, this thing has done a great job. It's imported my private key, it's got my public address right there. So it's the same one down here, eighteen C D G T Y and it already knows the balance that I've had in cold storage. All right. This was never online. So we can do two things here. Okay. One and the thing they recommend is to sweep your key which is actually a great thing to do. Okay. Sweeping keys mean you just merely yank the funds out of this address so the funds are no longer in here and they go to your blockchainwallet.info new address that we had seen before or the other way which is what we're going to do today is we're just going to import it directly. So I'm going to actually take this in as a full wallet and I'll now have two addresses in there and we'll see what that means in a second.
So I'm going to say import directly. Added Bitcoin address, wallet successfully sync with server. And noticed now that my balance has jumped up to $4 and 92 cents. I had $4 and 92 cents in this little cold storage setup. Okay. So now I can go and I can send money and remember if you brought something in from cold storage you don't have to wait for confirmation. Those are your Bitcoins already. I can start sending this out right away. And what I'm going to do I'm going to send it to the address which I didn't send any to in my previous video about making paper wallets and cold storage. And if you feel like grabbing the funds out be my guest. I'm going to put a dollar in there. And here's the address that I used in my previous video and now I'm going to send, I don't I'm going to send a dollar.
So you type in $1, make sure you don't type the amount over here in Bitcoin. Of course, I don't have enough Bitcoin to even sent out one Bitcoin. And now I'm going to say send payment. Again, you don't have to wait. As soon as you take it in from cold storage you can send it out because those Bitcoin are yours. You don't need confirmations. Here we go. Bam! And plip! Okay. And we see that my value has gone down. It's gone down more than a dollar because I've been charged transaction fee especially for the small amounts. Especially, sending Bitcoin around a lot they're more likely to charge your transaction fees. My total value here is now at $3 and 85 cents and I have successfully imported my money. So let me go to wallet home.
What I talked about earlier was that if you swept the funds from your paper wallet into the blockchain.info it won't send it to the address that you just brought in, it would send it to the new address that it had created. Okay. And that way is somehow more secure because you're not exposing your private keys as much online and every which other way. But hopefully this helps you understand how to get the money out of your cold storage be it a paper wallet or your cold storage, USB drive or any which other way and remember that you could actually send someone using the same method. You could just send them the private key and you won't even need a wallet to send them funds.
So I could send $5 to this paper wallet and then I could send some of the private key and they could do the same process somewhere else. So if I want to send funds to Uganda. And I want him to have instant confirmation, instant access for those funds I would send them the private key. He pops open wallet and he can spend the money right away. There is no delay. So if you need to send emergency funds and need to move right away this is another great thing. You can send the private key with the funds attached. Now remember any time you're sending private keys people can grab those private keys and use them. So if you're sending it online it's very insecure but for emergency situations say someone needs 20 bucks right away it's a great way to go.
So that's it for today. Please remember to comment, subscribe, do all those things you might do and I'll catch you at the next video.