Guide Offline Wallet

We are going to see how to have a wallet ONLY to receive BTC, in a very simple and effective way. It is about having a shared wallet between a PC and a mobile, with functionalities only to receive on the mobile. This “watch-only” wallet can also be had on an old mobile, without an internet connection. It would only be to generate the QR / address to receive.

OPTION A – Run from live USB OS

  1. Download TailsOS, live USB, and use Rufus to create the bootable USB drive with TailsOS ISO image.
  2. Boot with that USB drive (change the settings in the computer BIOS), and select RUN/Execute, not install, offline. This live OS already includes  Electrum wallet and KeePass.
  3. If you plan to re-use this LiveUSB TailsOS, you can create also a hidden active partition, that will be encrypted, to save important information, like the KeePass database file, electrum wallet backup. Here are instruction how to use “Persitent Partition” and a video tutorial here.
  4. Open KeePass app and create a new passwords database. Save it on another USB memory or you can also use persistent encrypted space from Tails. In that database you start saving all your wallets and personal info. Don’t forget to make copies of this file in other safe places.
  5. Open Electrum app and create a new wallet.
    1. Save the seed into your KeePass file
    2. Once the wallet is created, go to Electrum menu – Wallet – Information. Copy the MPK (Master Public Key) into your KeePass file.
    3. Also is better o save 1-2 BTC addresses. So go again to menu – View – Show Addresses, then go to the new tab “addresses” and copy 1-2 BTC addresses into your KeePass file, together with your wallet info (in the notes box).
    4. Done, you’ve created and saved an offline BTC wallet. You can go to point 12.

OPTION B – Generate a wallet from Windows machine.

  1. If you run a Windows machine it is recommended to check it before, to not have any malware or keylogger. The basic Malwarebytes (free) would be good enough for a preliminary scan.
  2. Download Electrum wallet for PC (Windows or Linux) – Run the Electrum installation without internet, just to create the wallet. Electrum does not need a connection to generate the wallet.
  3. Create a new wallet, we are going to name it “Sentinel” to identify it easier later, when making a backup copy of this wallet.
  4. Select “standard wallet” and then “create seed“, next step we use “Segwit
  5. It generates the seed for us and we save these words (write them on a paper or save in a file / USB / password manager)
  6. You have to put it word by word, to verify if you have saved it correct.
  7. Create a password for the wallet. NOTICE: write this password in your password manager / file along with your seed. This password is used to OPEN this Electrum wallet and asks for it when you make transactions (send).
  8. Ready! Now you can connect the PC to the Internet connection. The wallet is ready to receive BTC. You can enter “Tools – Settings” and activate the most used options, here is an example of how I use it. In Lightning we don’t change anything.
  9. From the menu, under “View”, activate all the options: “Addresses, currencies, Channels, Contacts”. Console is for advanced users only.
  10. We enter the “Addresses” tab to see the addresses generated and note the first one that comes out for verification with Sentinel wallet app. You can save the first 5-10 BTC addresses together with the seed, in the same file / password manager, to have a reference or simply have it as a BTC contact, without having to open the wallet (as an email address in your contacts)
  11. From the menu above, we enter “Portfolio – Information” and we get a window with details of the portfolio. From here you can also activate LN (Lightning network) for this wallet, later if necessary. But for now we focus on obtaining the MPK (master public key, zpub).
    • MPK = a public key, which can be connected in a simple and secure way to a wallet app ONLY to receive, which generates the same BTC addresses and synchronizes the wallet in any app that supports zpub format.
    • you can use the long code zpub or also scan the QR code.
    • You can save this information (QR / code) together where you have saved the seed, for reference, in case you need it another time
  12. On your mobile, download the Sentinel app (they are the same developers who have made the Samourai wallet). At the moment it is only for Android. You can also use BlueWallet watch only for iOS / Android.
  13. Once downloaded, we begin to connect the electrum wallet zpub with Sentinel / Bluewallet. He asks us for the type of wallet we connect and we select Segwit.
  14. Next step is to introduce the zpub. We have the option to scan the QR or enter / paste the zpub code. If you have the Electrum open with the information about the wallet, it is easier to scan the QR code. Ready. We put a name to the watch only wallet (Electrum to make it easier to identify where the funds come from).
  15. Verify that we have the same wallet / addresses as in Electrum. We click on the button below – Deposit and then a screen appears to receive, with the QR and the BTC address. Verify that it corresponds to the same address (usually the first in the list) that appears in Electrum. If everything is correct, then you already have a watch-only wallet. Every time you want to receive, you click this button and Sentinel connects to your Electrum wallet through the zpub.
  16. Optionally recommended to have an alternative copy of the Electrum wallet file: in Electrum, up in Menu – File – Backup and save the file in a safe place (not on the same PC!), An encrypted USB pendrive, external security disk, even it can be attached to the password manager program, along with the seed, for more security.
  17. A demo video on how to use Bluewallet in read-only mode, here