Offline Wallet with Electrum

XXX How to make an Offline wallet in Electrum XXX

Here's what you need:
-A laptop or PC that you won't use for anything else, OR an 8GB USB memory with decent read/write speeds to install Ubuntu ONTO.

-A CD-R and CD burner, or a USB memory with at least 1GB for placing the Ubuntu installer on. (to install Ubuntu FROM)

-the Ubuntu installer iso file:
http://www.ubuntu.com/download/desktop
(13.10 is the current latest, make sure you download the right bit version for the PC you plan on using. If you're using USB to install Ubuntu onto, then choose the bits of the PC you are most likely to boot it from. On

the download page, there is a "No, I don't want to donate now" you can donate later and just download the installer for free.)

-(If you will install FROM a USB memory) Universal USB Installer:
http://www.pendrivelinux.com/universal-usb-installer-easy-as-1-2-3/

-python-central_0.6.16+nmu1_all.deb:
http://packages.debian.org/squeeze/all/python-central/download

-python-setuptools_0.6.37-1ubuntu1_all.deb:
http://packages.ubuntu.com/saucy/all/python-setuptools/download

-python-pip_0.3.1-1ubuntu2.1_all.deb:
http://packages.ubuntu.com/lucid-updates/all/python-pip/download

-python-slowaes_0.1a1-1_all.deb:
http://packages.ubuntu.com/saucy/all/python-slowaes/download

-python-ecdsa_0.10-2_all.deb
http://packages.debian.org/jessie/all/python-ecdsa/download

-Electrum-1.9.8.tar.gz: (This may not be the latest, so check electrum's download page and see if there's a new tar.gz file up for any version after 1.9.8)
https://download.electrum.org/Electrum-1.9.8.tar.gz

Be careful:
-If you want to install from or onto a USB memory, the computer (motherboard) must support booting from a USB stick. Some older computers (motherboards) do not support this.


Steps:

If installing FROM a USB:
1. Run Universal USB Installer and choose the Ubuntu install iso file to include. Plug in your USB memory with at least 1GB, check the "format" box. Make sure everything is fine, then run. This will take a few minutes.

If installing from a CD:
1. Use your favorite CD burner program to burn the Ubuntu iso file to a blank CD-R

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2. Download the 5 deb files and the tar.gz file with Electrum in it. Place them in a USB memory laying around, or if you are installing FROM a USB, you can add an extra folder on the root of the USB called "files" and

place them in there.

3. If installing to a separate computer (one you will only use for bitcoin), insert the install CD or USB you created and turn on the computer. If you are installing ONTO a USB, stick the USB you will install FROM or the

CD you will install from into your computer. and reboot your computer. Before you reboot, unplug the internet from your computer.

4. Once you're PC reboots or boots, there will be a weird looking screen that comes up before the Windows screen. It should say a bunch of commands for the F-keys, (F2, F11, F12 etc.) try to find "Boot Menu" option.

Choose that key (F12 on my PC) and tap it a few times lightly. If you can't find it, you should tap F2 or whatever to open the BIOS menu. Once in the BIOS menu, find "boot order" under the menus, and make sure that

"USB" or "CD" is the highest priority, so that whatever you have as your Ubuntu install will be booted in highest priority. If you are using a separate computer for this, I would try to find a menu in the BIOS menu that

lets you disable Wi-fi Bluetooth etc. and disable those all. (You don't want any chance of accidentally getting online. If it's boot menu, select your install media drive (USB or CD drive) and hit OK. If you're in BIOS, set

the drive to highest boot priority and then find the "Save changes and Quit" option.

5. Once it boots up, you will see a list of countries in the left. Choose the country with the language you want for your Ubuntu install.
It will ask if you want to "Encrypt your install drive." I highly recommend this. Set a strong password that you will definitely remember: "correct horse battery staple" or something.
Then set another strong password you will remember for the account password. Disable "auto-login" and skip the Ubuntu ONE signup screen. ("Log in later" is the option I think)

(NOTE: MAKE SURE YOU CHOOSE THE RIGHT DRIVE TO INSTALL UBUNTU. The drive you choose will be deleted and overwritten, so do not choose your Hard Disk with Windows on it or anything)

6. Once the install is done, if you are installing ONTO a USB (8GB) then you will be told to insert the GRUB onto the USB. Make sure to select the 8GB USB you installed ONTO. Reboot, and if you installed ONTO a USB,

I would recommend removing the USB you installed FROM so that you don't get confused which USB to boot from.

7. After rebooting, you will have a fresh Ubuntu install. Check to make sure your wi-fi or internet isn't connected by checking the internet icon on the upper right. If wifi looks connected, right click it and click Disable

Network. Insert the USB memory or whatever that you have your 5 debs and 1 tar.gz on, and insert into your computer.

8. Once you have dragged them to your desktop, run them in the following order, and perform the following steps to each one:

order: 1. python-central_0.6.16+nmu1_all.deb, 2. python-setuptools_0.6.37-1ubuntu1_all.deb, 3. python-pip_0.3.1-1ubuntu2.1_all.deb, 4. python-slowaes_0.1a1-1_all.deb, 5. python-ecdsa_0.10-2_all.deb

steps: 1. Double click 2. click the install button on the right side of the window that pops up  3. Close the install window once it's done

9. Once all those are installed with no problem. Press Ctrl + Alt + T to bring up a terminal window.

-Type in "sudo pip install" without quotes, then include a space after install. Then drag your Electrum-1.9.8.tar.gz file from your desktop to the terminal window and drop it. It should then copy the file path and name of

file into the command line. Then hit ENTER and run this command.

If the last line of output before giving you control back says "Electrum successfully Installed!" You have successfully installed Electrum

Now, just type in the word "electrum" into the terminal and hit ENTER. Electrum will start.

10. After Electrum loads, you will notice the electrum icon on the task bar to the left. Right click it and click "Lock this icon to toolbar" or something.

11. Create New Wallet -> 12 random words will come up -> Select and copy those words with right click and copy -> in the next window, it will ask to re-type those 12 words, paste them into the window and continue.
(Don't ever save these 12 words onto a file or anything. If you want to backup your wallet so you can restore the wallet at any time, no matter how much you use it. Then write these 12 words down on paper with a pen.

Then fold it up and lock it in a safe deposit box. Anyone who knows those 12 words and knows they are used in Electrum will be able to restore your wallet in Electrum at will)

12. Choose a strong password that's easy to remember, but different from your hard disk encryption password and account password.

13. Once the main window shows up, you can change your language in the preferences. (the tool bar shows up at the upper left of the OS, similar to how MacOS does their menus. Windows users will not be used to this,

and Ubuntu hides the tool bar until you hover your mouse over the upper left of the screen... kinda confusing)

14. Click on Wallet -> Master Public Key on the tool bar. A QR code and a long string of letters and numbers will come up. Copy them -> Ctrl + Alt + T to open terminal -> type in "gedit" without quotes and ENTER ->

paste the long string of numbers and letters into this notepad-esque program and save as txt file onto your USB memory (not the one Ubuntu is installed on!)

XXX Now you have a completely offline wallet. Do not let this OS ever touch the internet. If the PC you installed on uses Wi-fi, make sure it doesn't connect to anything... Now your private keys are fairly safe XXX

XXX Create an online watch-only wallet and send Bitcoins from it XXX
What you need:
- Offline Wallet (See above)
- The Master Public Key of that Offline Wallet (see #14 above)
- The install file for your OS that you will use online.
https://electrum.org/download.html
(standalone are for beginners, "Source install" is for experts. Anyone using a foreign language, I recommend the normal installer.)

1. Install Electrum. Run it.

2. Choose "Create Watch-only wallet from Master Public Key"

3. Copy the Master Public Key from the txt file you made on your USB memory etc. and click next.

4. The same send addresses as the offline wallet will show up in this wallet.

5. (How to send money from an offline wallet): Input the send address on the send tab, amount, fees, etc.

6. Click "Create unsigned transaction" and save the transaction to an empty USB memory. (Everytime you bring a transaction to your offline computer, I recommend formatting the USB memory just in case before you

save your transaction to it.)

7. Boot up the offline OS. Insert the USB with the transaction file.

8. Open Electrum and choose Tools -> Load transaction from file -> choose the file with the unsigned transaction.

9. Check the open transaction window. Click "sign" then once the Transaction ID is set, click "save" and save it to your USB memory. (note: in addition to the address you are sending to, there may also be a second

send address, this is sending the "change" of your outputs back to yourself, so don't worry. If you're super paranoid, check your offline wallet's "Change" address section in the receive section, and you should see the

same address in there.)

10. Return to your online watch-only wallet, and open the signed transaction file through the "Load transaction from file" option in the tool menu. Click "Broadcast" and your transaction is complete. It should show up in

your history tab now. Right click and click "Copy to clipboard" to copy the transaction ID. Check the website "https://blockchain.info/tx/<yourTXIDhere>" without quotes and replacing <yourTXIDhere> with the

Transaction ID you copied and you will see the status of the transaction.