Your First Wallet

8.9 min read

2020/07/23

~Pete

#tutorial #bch wallet


Setting up your first cryptocurrency wallet is an important step to take, but it can be an intimidating experience. There are many options, jargon, things to backup secretly, passphrases and, - best of all - if you make a mistake, you could lose your crypto, forever. 🙃

But don't worry, this article will take you through the full process of setting up your wallet and sending your first transactions. You'll likely do this many times, so it's worth understanding the basic steps of the process. It gets easier each time.

We'll go over installing, setting up, backing up, restoring, receiving, and sending cryptocurrency, on both desktop and mobile wallets. For this introduction, we'll use the Bitcoin Cash (BCH) blockchain, the Electron Cash desktop wallet, and the bitcoin.com mobile wallet.

Other wallets also work, but we suggest using a BCH Wallet with SLP for this tutorial.

Starting with low fees

Bitcoin Cash (BCH) is the ideal blockchain to start with due to its long legacy, active development, lots of varied applications, expanding use-cases in retail, similarities to Bitcoin (BTC), and it's very low transactions fees. The low transaction fees are especially valuable when starting as they allow users to experiment with sending to themselves, friends, or services with small amounts before committing to larger value transactions. This way you are able to begin receiving, sending, and using crypto as currency immediately without worrying about high transaction fees or long confirmation times.

Almost all cryptocurrency wallets follow the same pattern for the basics - create, backup, send, receive, restore. The learnings from this guide can be applied and followed along with most other cryptos or wallets of your choice.

Why These Wallets

Electron Cash and the BitcoinCom Mobile wallet are full-featured Bitcoin Cash (BCH) wallets, which are also easy to use. These wallets allow all of the basic operations while providing privacy features, SLP support, point of sale support and other valuable features. Electron Cash is perfect as a computer wallet with its strong privacy, advanced coin control, flexible usage, and a large number of advanced features for every use-case. The Bitcoin.com wallet is a great mobile wallet with account management, SLP token support, Bitcoin (BTC) wallets, Ethereumm (ETH) wallet support.

Note that both of these wallets are focused on specific blockchains. Electron Cash is focused on only Bitcoin Cash (BCH), and the Bitcoin.com Wallet is focused on Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH). Chain-focused wallets are valuable for learning as they usually have chain-specific features. Some of which to look out for: reusable addresses, slp token, coin control, CashShuffle/CashFusion, ERC token support, NFT tokens, staking and more. Wallets that support many blockchains often only implement the basic features (send, receive) and rarely support the unique aspects of each blockchain.

It's common to store multiple coins in a multi-currency wallet -, and hold a smaller amount of specific currencies in single coin wallets for daily use, and advanced features.

Installing Electron Cash

  • Visit ElectronCash.org
    • Verify the URL is correct, there are many phishing websites around
  • Download the latest version
  • Verify checksum
    • This step may seem complicated, but it's important to verify the wallet is real
    • This step gets simpler each time
  • Install the Electron Cash wallet

Setup / Backup Wallet

Hurray, Electron Cash is installed, and you're ready to start your BCH adventure. Let's get the wallet ready to use and secured.

  • Start by selecting new wallet
  • Give it a name
  • Selecting standard wallet
  • Create a new seed
    • Note: This is where you can restore wallets by entering their seed phrase
  • Write down the seed phrase, and keep them very, very, private.
    • Seed phrases are typically 12 or 24 words long and look like:
      • tragic convince era road before... etc etc
  • Enter your seed word on the next screen to confirm it's written correctly
  • Backup the wallet seed phrase and derivation path
    • Backing up the derivation path is good practice, and if it's not available, take note of which wallet you're using.
    • wallet > view seed > copy derivation path
      • For Electron Cash this is by default m/44'/145'/0', and for the Electron Cash SLP edition m/44'/245'/0'

Once those steps are done, Electron Cash is ready for use, click around and explore the UI. Next, let's get a mobile wallet installed and some free BCH from a faucet for practice.

Seed Phrase

Seed phrases should always be kept secret. This phrase is all someone needs to gain access to your crypto wallet assets. All addresses derived from a compromised seed phrase/wallet should be considered public and not used for anything or store any assets.

Restore Wallet

Similar to the setup steps, but instead of generating a new seed phrase, use an existing phrase - one you backed up when setting up a wallet.

If the seed phrase was created from the same wallet you're restoring with, then this should just work. If not, you may need to enter the derivation path the wallet was created with. Typically, this value is standardized across all wallets for a cryptocurrency, but nothing prevents wallets from being created on non-standard paths. If you didn't back up the derivation path with the seed phrase, and the restoring wallet cannot determine the path, then it can probably be found with some research.

BitcoinCom - BCH PLS

Now for the fun part. Receiving, sending, and using Bitcoin Cash (BCH).
Let's get some BCH by heading to the bitcoin.com BCH faucet, and installing wallet.bitcoin.com on your phone to qualify for free Bitcoin Cash (BCH).

  • Install the mobile wallet
  • Backup the seed phrase in a similar way as before
  • Go through the faucet steps
  • Continue when you got your BCH

Alternatively, you can buy some crypto, but a faucet is easy for starting with no investment.

Faucets

Faucets usually give away small amounts of a cryptocurrency, just enough to pay for 1-3 transactions worth of fees. Enough to try using p2p crash and see how easy and fast it can be.

Your First Transaction

  • Open the Electron Cash wallet
  • Go to the receive tab.
    • You should see a QR code. This represents one of your receiving addresses
  • Open the BitcoinCom wallet
  • Go to send tab and scan the QR code in Electron Cash
  • Send the transaction to your Electron Cash wallet
  • The transaction should arrive after a few seconds. 🎊

That's it. You now have two wallets ready to use, one for Mobile, and one for Desktop. Successfully sent micro amounts of funds between them. With this same process you can send any amount to anyone. With desktop and mobile wallets setup, and practice sending funds between them, you have a pretty good wallet setup in the works.

Here are a few things to notice.

  • A small part of the transaction was spent on the transaction/miner fee
  • In Electron Cash's addresses tab one of the addresses now has funds, and in the receiving tab the QR code shows a new address
    • Each wallet can generate effectively unlimited addresses to always receive on a new address. Which is useful for privacy.
  • When the transaction arrives, it has a status of unconfirmed, when it gets confirmed in a block, the confirmations increase by 1 and so on.
    • BCH coins can be spent while they are unconfirmed up to 50 times.
  • Your Receiving Address begins with bitcoincash:,
    • this is an address format specific to BCH.
    • You will also often see legacy and simpleledger: address formats in the BCH ecosystem.
  • QR codes can encode more than a simple address, such as: requesting specific amounts, point of sale payment requests, SLP token amounts, but this goes beyond the scope of the article.

Ways to Spend Micro Amounts

Now you're the proud owner of a micro amount of Bitcoin Cash (BCH), know how to keep it secure, and can spend it with confidence, but what can you do with this micro-amount? Turns out, a few things. Here are a few ideas.

SLP Tokens / Edition

Simple Ledger Protocol (SLP) is a rapidly growing token ecosystem within the Bitcoin Cash (BCH) space. It's already being used for experiments in tipping [$SPICE], stable coins [$USDH, $USDT], exchange tokens [$DROP] and new ones are created every day. To start using SLP token, you need to use an SLP compatible wallet. The Bitcoin.com mobile wallet is already SLP compatible, but for Electron Cash - at least for now - you'll need to install a specific SLP version.

  • On their main page, scroll down to the SLP version section
  • Repeat all the setup and backup steps from earlier
    • Note: SLP aware wallets often use a different derivation path of BCH only wallets
  • Start using SLP tokens in the new Tokens tab

2022 Smart BCH

Update: 2022 - SLP is not used now that Smart BCH exists on Bitcoin Cash (BCH). Look for Smart BCH features and integrations going forward into 2022 and beyond.

Finding Advanced Features

Wallets are capable of a lot more; we've only touched the surface. Explore the menus and see if you can enable CashShuffle, spend individual UTXO (coin control), change the fiat currency conversion, turn on quick-send, claim your cash CashAccount, etc etc.

Each wallet has a different set of features, so explore each one to find new features.

Seeing Your Transactions

Each wallet typically shows its current balance and transaction history. If you want more details on individual addresses or transactions, you can use a block explorer. There are many to choose from, but here are three good ones to try. Just enter the address or transaction ID to get started

You can also try spotting your transaction as-it-happens on the blockchain with our TX-Watch tool.

Further Reading

Thanks for reading this article. We hope you have a better understanding of bitcoin wallets and the basics of digital cash. Follow us on Twitter at @BuyHodlSell for updates. If you'd like to suggest an improvement, correction, or anything else, get in contact with us.