Blue Wallet Guide
Blue Wallet is a Free and Open-Source, Bitcoin-only wallet for mobile and Mac. Create a Bitcoin wallet and backup in a few clicks. It is easy to use, with a very small learning curve. The Bitcoin wallet is fully non-custodial, allowing for complete control over use of funds. Advanced features are available for enhanced usability and security. As mobile wallets go, this one is very secure.
This is a great choice for individuals that are beginning their self-custody journey or those that use Bitcoin on a daily basis.
Notes, Benefits, & Limitations of Blue Wallet
- You can use Blue Wallet in combination with all major hardware wallets.
- It is also a custodial Lightning wallet but you can connect it to your own LND hub for greater autonomy, as well as connect it to your own Bitcoin node via an Electrum server.
Good security with password and biometrics
Easy backup and recovery
Very simple to use
Advanced transactions features
Compatible with hardware wallet
Reputable and renown
Setup time: 30 minutes
Not available on Linux or Windows
Less secure than hardware wallet
What is this all for?
- Buying Bitcoin from a non-custodial exchange.
- Ability to transact with Bitcoin on mobile (funding exchanges, making payments).
- Storing Bitcoin with backups for long-term before upgrading to a hardware wallet.
- Managing different wallets for different purposes.
- Transact easily using the QR code capabilities.
Tip: If this is your first time configuring a bitcoin wallet, schedule a call with us so we can walk you through the process. Go slow, create test transactions, and ask questions before using a wallet for large amounts of bitcoin.
This guide will cover, in order:
- Installing the mobile application
- Creating a Bitcoin wallet
- Creating a passphrase-protected wallet
Password and biometrics security
- Creating a backup
- Dummy wallet for plausible deniability
- Receiving Bitcoin payments
- Sending Bitcoin payments
- Additional settings and options
By the end of this guide, you will have a Bitcoin wallet installed on your mobile device which lets you receive, send and store bitcoins. Your wallet will be encrypted with a password, protected with a passphrase and you will have proper backups in case your phone is damaged, lost or stolen. You will know how to use the security features of your Bitcoin wallet to maintain plausible deniability.
This is perfect if you want to buy Bitcoin and store them securely, and if you want to make payments using Bitcoin, and if you don’t mind using a phone.
Securing the wallet: Overview of the basics
Before we get into the process of setting up your wallet, go over these basic security principles to make sure that you don’t miss any important information and that you don’t make any avoidable mistakes.
There are 3 security mechanisms that prevent you from accidental loss or theft of your Bitcoin:
1. Password and biometrics on Blue Wallet
2. Seed Backup recovery codes
3. Wallet passphrases
If you lose your Blue Wallet
- The Seed Backup allows you to recover your Bitcoin wallets
- Your Passphrase allows you to unlock the recovered Bitcoin wallets
Both the Seed Backup and the Passphrase are required to recover a lost wallet. If you lose the Seed Backup OR the Passphrase, you will not be able to recover access to your Bitcoin if you lose the Blue Wallet app or your mobile device.
If someone steals your mobile device
- The PIN protects unauthorized access to your Blue Wallet, should it fall into the wrong hands.
If someone steals your Blue Wallet and your password
- They will be able to unlock the wallet, but they will not be able to spend funds without your biometrics.
If someone steals your Seed Backup recovery
They will not be able to recover your Bitcoin wallets without the Passphrase.
If someone has access to both your Seed Backup your Passphrase, they can steal your Bitcoin! Do not keep a copy of them in the same place!
Important Basics to Know
The next step involves creating a paper backup of your Bitcoin wallet, which you will need to recover access to your Bitcoin if your phone is damaged, lost or stolen.
The backup consists of a series of words generated randomly by the Bitcoin wallet.
These words allow you to recover access to your Bitcoin wallet in case anything happens to your phone.
Before creating your paper backup, please read the 5 rules below carefully.
There are 5 rules to making a Bitcoin backup;
- If you do not have a backup and you lose access to the Blue Wallet on your phone, you will lose access to the Bitcoin permanently.
- Each wallet you create in Blue Wallet has its own backup that you must write down – there is no general backup.
- If someone finds the backup of your wallet, they can steal your money.
- Never store your passphrase in the same place as your backup. Don’t leave them out in the open either, someone will take your bitcoin.
- Don’t take a picture, print or share your words
Scenarios where you can lose your funds:
The next step involves creating a passphrase. This prevents you from getting your funds stolen if someone gets access to your device and its PIN or to your 12-word backup.
What is a passphrase?
- It acts as a password that you add on top of your wallet backup (12-word seed phrase).
- You can create as many passphrase-protected wallets as you like, with each new passphrase generating a completely new wallet.
- It serves to protect your funds in case your 12-word backup is compromised (stolen, someone else sees it), since it is required to gain access to your funds.
- The default wallet does not have a passphrase, adding one gives you plausible deniability, since little to no funds can be held on the default wallet, with the majority held on the passphrase-protected wallet.
- If someone comes into contact with your 12-word seed or digital backup, they won’t be able to steal your funds since they also need the passphrase to unlock the funds.
How can you lose your bitcoin?
Although Blue Wallet is on your phone, the risks of losing funds by getting hacked are very low, unless you are specifically targeted by a highly skilled attacker. The most common causes of people losing their bitcoin are the following:
- Someone finds your backup.
This person is often someone in your close surroundings.
- You leave your phone open and someone has access to your password.
- Your phone stops working or you lose it and you are missing your backup and passphrase.
- You brag about your holdings and someone attempts to take them from you through coercive means.
Be careful how you store your seed phrase and passphrase, these are crucial for the recuperation of your funds, but are also targets for someone wishing to steal your funds.
Whoever has access to both the passphrase and the 12-word seed phrase can steal your funds.
Create Your Wallet & Backup
What you need:
- One of the following devices:
iPhone, iPad or iPod touch with iOS 13.0 or later, Android device
- Paper and pen for the wallet backup process
- 30 minutes of your time
- An internet connection
Make sure you are in a secure location with no peering eyes.
Close off any window blinds and make sure no camera can see what you’re doing (computer camera, phone camera, etc).
Wallet & Backup Creation – 1 of 2
- Download Blue Wallet from your app store.
- Click on the “Add now” button or the “+” icon in the top right corner, this will take you to a new screen.
- Enter a name for your wallet and click on the “Bitcoin wallet” option.
Wallet & Backup Creation – 2 of 2
You have to create a backup and hide it and make sure you don’t store it at the same place where you keep your password.
- Get a pen and a piece of paper.
- Click on “Create”. You will be provided with 12 words. Note them down with pen and paper.
- Take your time and write them down correctly. Make sure that the words are easily readable and in the correct order.
- Write down the number in front of each word, to make sure you know what the correct order is.
- Triple check to make sure.
- Find a secure way to store it. Get creative! You can do two backups and store them in different places.
If Blue Wallet suddenly goes out of business and they remove their application from the app stores, having your backup will allow you to still have access to your funds.
Passphrase Security Basics
- Write down the passphrase you want to use before entering it in your device.
- Use a combination of words as a passphrase to have less trouble remembering it.
- Use at least 12 characters in your passphrase, 24 characters offer more security.
- If someone has access to your seed phrase, the passphrase will prevent them from taking your Bitcoin.
- Create a unique passphrase that nobody can guess but that you can remember.
- If you lose the passphrase, you lose access to your Bitcoin forever (if you also lose access to your device).
- You cannot change your passphrase. You can only create a new one, which in turn will generate a new wallet.
- The passphrase is required to recover your access to your Bitcoin if your device is damaged, lost or stolen.
Steps for Receiving Bitcoin Payments
- Tap on the wallet you want to use
- Select “Receive”.
- Tapping on the address will copy it to your clipboard.
- You can share the address to others by selecting the “Share” button and selecting your preferred messaging app.
- You can also create an invoice by selecting the “Receive with amount” option.
- Once the payment is received, it will appear in the “Transactions history” and will also appear in your available balance.