Simplified Guide to Bitcoin Self Custody
Yes you can!
Here's an updated and simplified guide on setting up self-custody for Bitcoin using a Coldcard and purchasing Bitcoin through Strike. This guide includes current tips and timesavers to streamline the process.
Setting Up Self-Custody with Coldcard Mk4
Purchase a Coldcard Mk4
Where to Buy: Directly from the manufacturer to ensure authenticity!
Packaging: Look for tamper-evident packaging to confirm it hasn't been compromised!
Unboxing and Initial Setup
PIN and Recovery Seed: Upon unboxing, set up your PIN and make a secure backup of your recovery seed offline (utilize the paper card provided).
SD Card and USB Cable: Acquire a standard SD card for multisignature setups and data transfers. You'll also need a USB-C to USB cable for connection to your computer, as it's not included.
Install Required Software
Connection: Connect the Coldcard to your computer with the USB-C cable.
Wallet Software: Download and install Sparrow Wallet to your computer, recommended for use with Cold Card.
Generate Wallet on Cold Card
Wallet Setup: Use Sparrow Wallet to generate a new wallet linked to your Cold Card, following the on-screen setup instructions.
Receive Bitcoin
Address Generation: Generate a receiving address in Sparrow Wallet for the next steps (easiest is to use the QR Code - see below).
Buying Bitcoin from Strike
Download and Install Strike
App Stores: Available on both the App Store and Google Play Store.
Installation: Follow the installation process on your mobile device.
Create an Account
Sign Up: Open the Strike app and register for an account.
Verification: Complete all necessary verification steps as required by Strike.
Link Bank Account (Optional)
Bank Linking: For direct bank funding, follow the app's instructions to link your bank account.
Deposit Funds
Funding: Deposit funds into your Strike account using your preferred method (e.g., bank transfer).
Purchase Bitcoin
Buy Bitcoin: In the Buy/Sell section, enter the amount of Bitcoin you wish to purchase and confirm the transaction.
Withdraw Bitcoin to Cold Card
Withdrawal: Post-purchase, withdraw your Bitcoin to the Sparrow Wallet address. All you have to do is scan the QR code on your Sparrow Wallet with the Strike app - verify the address, select how much to send and send. Make sure to confirm the address you are sending to. You can check all the digits or just the first several and last several (typically bolded), but if it’s your first time, you may want to check them all just so you are confident.
Zero Cost Option: For non-urgent transfers, select the no-cost withdrawal option for completion within 24 hours.
If you’re nervous: If it’s your first time sending, send a small amount to start with. Once you see that it works fine, then you can send the rest. Eventually you’ll be comfortable sending larger amounts between your wallets! Transaction fees can be high for small amounts, so consider building up your Bitcoin balance on Strike and then send to cold storage periodically.
Verify Transaction
Transaction Verification: Use Sparrow Wallet to verify the incoming transaction to ensure it's received. It should show up as unconfirmed when it’s broadcast to the Bitcoin network, but it may take a while to confirm if it was sent low priority. Patience is key. I have moved Bitcoin around many times between my wallets and it works every time!
Securely Store Cold Card
Safekeeping: Store your Cold Card in a secure and separate location from your recovery seed to protect against physical and unauthorized access.
Tips and Timesavers
Recovery Seed Safety: Consider using a metal seed storage solution to protect against fire and water damage.
Multisig Setup: For additional security, explore setting up a multisignature wallet with your Cold Card and Sparrow Wallet. Keep it simple, though (2 of 3 seems to be a good balance between security and ease of use) and if you have a large amount of Bitcoin, consider doing collaborative custody multisignature. There are several providers, such as Unchained that can help with this for a small annual fee.
Regular Backups: Regularly backup your Sparrow Wallet configuration to streamline recovery if needed.
Software Updates: Keep both the Cold Card firmware and Sparrow Wallet software updated for security and new features.
Security Practices: Practice good security hygiene by regularly reviewing and enhancing your setup's security. Most of the big Bitcoin only financial companies have good online resources and videos about security including Unchained, River, etc.
Congratulations! You've now set up self-custody for Bitcoin using a Cold Card and purchased Bitcoin from Strike, incorporating the latest practices and tools for security and efficiency.
If you’re wondering about this post’s artwork, it’s my homage to Bob the Builder with a Bitcoin twist - can we fix it, yes we can! The money, that is! Not financial or legal advice, for entertainment only, do your own homework. I hope you find this post useful as you chart your personal financial course and Build a Bitcoin Fortress in 2024.
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