First Steps in the Bitcoin Journey

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Introduction

A person has awaken after a minor amount of research and now realizes the value that Bitcoin provides. Typically, this person is not a computer geek and nor do they want to become a computer geek. They just want to purchase small bag of bitcoin and HODL it for the forseeable future.

Typically, the initial steps are:

  1. Which wallet should I use?

  2. How do I purchase bitcoin?

If they are like most people, they would start googling around and determine that there are quadzillion wallets to choose from and likely think Coinbase or some other centralized exchange is the least frictional way to purchase bitcoin. They would be correct in thinking that a centralized exchange (CEX) is the least frictional way to purchase bitcoin. After purchasing some bitcoin, I would imagine it would stay there indefinitely.

If someone is willing to take the risk of a corporation being in absolute control of their Bitcoin, who am I to tell them differently. If they didn't want to take this risk, I would advice them as follows for purchasing Bitcoin.

  1. Find an individual in your community that would be willing to sell you some Bitcoin.

  2. If you perform service(s) or have product(s) to sell, being willing to accept Bitcoin in trade at a discount.

  3. Search for no-KYC methods to purchase Bitcoin.

  4. Buy a Bitcoin hat and wear it around. Let others know you are a bitcoiner. Bitcoin is a network and people need to network too.

  5. DO NOT USE YOUR NORMAL BANK ACCOUNT FOR PURCHASING Bitcoin. Setup account at a different Bank for any bitcoin transactions.

  6. Bitcoin only. Absolutely, don't HODL shitcoins their future value is zero (my opinion).

Computer Setup

The setup of the computer environment that your Bitcoin wallet runs in is MORE important than the wallet that you use. The goal is to have a idiot proof environment running your desired wallet. My advice is to run a virtual linux system who's only function will be to run a bitcoin wallet.

  1. Start with the desktop/laptop computer then graduate SLOWLY into mobile if desired.

  2. Install Oracle VirtualBox on your computer and it doesn't matter the Host OS that you are using. How to Install VirtualBox This host computer should have a minimum of 16GB memory with 4/8GB available with 20GB of free storage space.

  3. Recommend using Linux. Pop!_OS it has been working well for me.

If your existing desktop/laptop is old or doesn't have the appropriate resources for hosting a single running VM, then consider purchasing a new desktop or laptop computer. System76 has some great hardware options for running Linux.

I would go for the Meerkat mini computer with 4.5MHz CPU, 64GB memory, and 2TB SSD storage which would cost about $883.00. With this setup, you now have the ability to run 5 to 6 VM instances concurrently. My system has a slightly smaller set of resources and I run 4 VMs concurrently, with one VM running a Full Bitcoin core node.

Once you have your linux VM instance running, it is now time to install a bitcoin wallet. I'm recommending you install:

Blockstream's Green wallet Installation

Blockstream's Green

The installation, setup, and usage of this wallet can't get any easier.

Click on the above link to download the Green wallet application. You should see the following file in your download folder:

/home/username/Downloads/BlockstreamGreen-x86_64.AppImage

Where username is the account name you set on your Linux system.

Follow these instructions to verify your download

An AppImage file is binary file that can be executed to start the application, but in Linux you have to flag the file as executable first. Launch File Manager and select this file and then right click on the file to open the properties dialog. Check the box that allows execution.

Now in File Manager you can double click the file and it will start the Green wallet application.

Typically in Linux binary files are located in the directory:

/usr/local/bin

Personally, I renamed the AppImage file to GreenWallet and moved it to the /usr/local/bin directory. This way from the Terminal appliction I can just type in GreenWallet to start the Green wallet application.

The first time you run Green wallet it will create a default data directory at this location

/home/username/.local/share/Blockstream/Green

In Linux a directory or file name that starts with . is hidden by default. Within File Manager in the upper right hand corner you can click on the settings icon and select the option to view hidden files and directories.

Within the default data directory, you will see the following directories:

 app  cache  gdk  logs  wallets

For each new wallet created, an associated file name will be created in the wallets directory. The file name will be a GUID like value d014866837c74abbb068. You'll have a unique file name for each wallet you create.

If you renamed your binary file like I did, you can type the following command in the Terminal application window to display the version of the Green wallet installed

GreenWallet -v
Green 1.2.9

My assumption is this is your fist bitcoin wallet exposure. So, I recommend creating a Testnet Bitcoin wallet first and get some experience receiving and sending bitcoin with play money. By default Green has the Testnet option disabled so on the first startup of the Green wallet you need to navigate to settings and enable Testnet.

When creating a new wallet, you will be provided a 12 word recovery phrase for your wallet and be asked to provide a six digit PIN for your wallet. You need to write down the 12 word recovery phrase and PIN on two different pieces of paper. One for your home and one for an offsite location.

ANYONE WHO KNOWS YOUR 12 word recovery phrase can recover your wallet and steal your coins. Each wallet you create will have a unique recovery phrase that you'll have to write down, the PIN can be the same or different your choice. If you lose your PIN or recovery phrase, NO ONE CAN HELP YOU RECOVER.

Enter GreenWallet in a Terminal window to launch the Green wallet application and enable Testnet then create a Bitcoin Testnet wallet.

To receive some Testnet coins, google for bitcoin faucet testnet and request some bitcoin testnet coins.

Now that you had some experience on Testnet sending and receiving bitcoin, you are ready to create regular bitcoin wallet using the same process as describe above.

Now, its time to backup your VM instance. You'll be needing two different USB drives with 32GB capacity each. One drive is for local backups you keep at home and the other is for an offsite backup location. DO NOT store your recovery phrase(s) with you backup drives.

Shut down your VM instance, and with VirtualBox management interface find where your VM instance files are located and copy that directory structure to each USB drive.

EACH TIME you plan on changing something on your VM instance, perform a backup before making the change. If the change causes any problems, you have easy way to retreat to your prior VM instance.

Hot and Cold Wallets

Note that the wallets you've just created are termed HOT WALLETS and that is because everytime your VM is running your wallet is accessible. Given this current configuration, this VM should only be up and running when you are actively using your wallet(s).

If you want to have a VM running for other usage needs along with the Green wallet installed you'll want to make use of COLD WALLETS.

I'll be saving the COLD WALLET setup for a follow-up article. But in short, one can execute:

 GreenWallet --datadir XX

Where XX is a reference do a disk volume that you manually bring on and offline at will.

Next Steps

This article will show you how to create Cold Storage using VeraCrypt for your Blockstream's Green Wallet.