How to make a Bitcoin Offline Transaction

28 Sep 2017

If you’re using it correctly, Bitcoin is as safe as it gets. As long as you are in control of your private keys, hackers have little chance of targeting your specific wallet for a theft, since your private keys are not stored in some central database with others. However, it is still possible to fall victim to attack. Whether someone somehow discovers you have Bitcoin and decides to hack you (which is hard, yet possible) or if you download a virus by accident, it is still possible to fall victim to an attack.

If you want to be extra sure, you may want to buy a hardware wallet. These help you keep your Bitcoin safe by keeping your private keys outside of your computer, making them impervious to online attacks. Click here to buy the KeepKey hardware wallet.

These wallets can be somewhat expensive, however, and not everyone has the chance to acquire them. So what can you do to ensure more safety? Well, if you have two computers, you can always keep your private keys separated from the internet, protecting them completely against cyber attacks. All you have to do is, create your transaction online, sign it offline to protect your keys, and broadcast it online again. This is what is known as “air gap” protection or "cold storage"

Part 1 - Install Electrum

To make your offline transactions, we'll advise you to use Electrum. It's a great light-wallet with a very intuitive interface.

Step 1: Click here to download the Electrum wallet. Download the version that best fits your O.S
Step 2: Put the setup on a usb stick or external hard drive and take it to your offline computer.

Step 3: create a new Standard wallet and click “Next

Step 4: Choose “Create a new seed” and click “Next

Step 5: Now that you have a seed, store it safely and click “Next

Step 6: Enter your seed and click “Next

Step 7: In order to protect your wallet, you may want to add a password. Enter a strong password and click “Next

Electrum will now create new addresses for you. In order to send btc, you'll need your password, so make sure you store it safely. It is possible that Electrum crashes after the installation if your computer is offline (which is advisable). If this happens, simply ignore it and open Electrum normally.

Step 8: To choose and use a wallet address go to "Addresses"

Step 9: You can use any of the addresses to recieve Bitcoin with. Simply right click one of them and click "Copy Address" to get the wallet address and send BTC to it. You can also choose to use multiple wallet addresses which is advisable

Part 2 - Get your public keys

Now, in order to have a watch-only version of your wallet, we need to export our public keys from the offline wallet into a newly installed online Electrum. So, let's do it.

Step 1: Go to "Wallet"


Step 2: Then click "Master public keys"

Step 3: Copy the master public keys shown. These will allow you to create an online watch-only address.

Step 4: Store the public keys on text file and save it to a USB stick or external HDD

Part 3 - Create a Watch-only address

If you didn't install Electrum, do so and select "Standard wallet" then follow steps 5 and 6

Step 1: If you have already installed Electrum on your online computer, then click on "File"

Step 2: Then, choose "New/Restore wallet

Step 3: Name your wallet and click "Ok"

Step 4: Select "Standard Wallet" and click "Ok"

Step 5: Select "Use public or private keys" and click "Ok"

Step 6: Now get the public keys from your text file on the USB stick (the ones you saved from your offline wallet) and paste them. Then click "Ok"

Your watch-only wallet will be created. Electrum will load and your transaction history will be displayed. Now it's time to make a transaction.

Part 4 - Create a transaction

The transaction you will create will not be broadcast to the Bitcoin network yet since this is a watch-only wallet.

Step 1: Go to "Send"

Step 2: Enter the address you want to send BTC to (1), the amount of bitcoin you want to send (2), then click "Preview" (3)

Step 3: The transaction has now been created. In order to sign and then broadcast it, we will need to click "Save" and store it on our USB stick

Now that you have saved your unsigned transaction on your USB stick it's time to sign it on your offline computer


Part 5 - Sign the transaction

Step 1: Once on your offline computer, open the Electrum wallet
Step 2: Go to "Tools"

Step 3: Click "Load transaction"

Step 4: And choose "From file"


Step 5: Insert the USB stick in your computer and load the previously saved unsigned transaction from it

Step 6: Your transaction will be loaded. Click "Sign" to sign it with your private key

Step 7: Enter your password and click "Ok"

Step 8: Your transaction is now signed. Click "Save" to save your newly signed transaction

Step 9: Save the file to the USB drive once more


Part 6 - Broadcast the signed transaction

Step 1: Once on your online computer, open the Electrum wallet
Step 2: Go to "Tools"

Step 3: Click "Load transaction"

Step 4: And choose "From file"

Step 5: Insert the USB stick in your computer and load the previously saved signed transaction from it

Step 6: Your transaction will be loaded. Click "Broadcast" to enter it into the Bitcoin network. This will make the transaction live, meaning that it will be final

You can now use your Bitcoin wallet without fear of being hacked because even if you are, your private keys are safely stored on your air gapped computer where no hacker can reach it and even if any virus got into that computer, it wouldn't make a difference. You are ready to use Bitcoin like a pro! Of course, if you prefer the easy route, click here to buy a KeepKey Wallet! It will make your life easier.

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