Are you looking for a quick way to get started with Bitcoin? Confused by the multitude of options? Let us speed you through the learning curve:
Set up your phone wallet
My favourite Bitcoin wallet for android is Samourai Wallet. Samourai Wallet is designed to offer some of the latest privacy features, as well as ‘power user’ features for those users who want them. If you don’t have an android phone, you could consider getting a cheap android phone (or if you have the money, a Pixel 3A is a good mid-range ‘value pick’) to install Samourai Wallet on.
You install the wallet on your phone and follow the prompts to set up. My main tip would be: Make sure you write down the 12 word seed AND passphrase – please keep these safe and hidden! If anyone else gets these details, they can steal your bitcoins. If you lose these, you risk losing your bitcoins. Many people have lost their seed or passphrase and lost their bitcoins. Don’t make this mistake!
Obviously it’s good to remember the (separate) PIN for the app, but so long as you have the seed and passphrase, you can recover from losing the phone.
Some other tips:
- When you go to spend using your Samourai Wallet, you should wait for the blue loading line to finish moving before attempting to spend.
- When you do spend, aim to do it using a ‘STONEWALL’ spend (typically this will be auto enabled in the wallet if you spend less than 50% of your balance). Notice how STONEWALL is auto toggled below, and showing how many bits of entropy the transaction will have. This helps preserve your privacy.
Receiving your first bitcoins
You can open up Samourai Wallet, enter your PIN, click the plus button in the bottom right, click ‘receive’ and this will generate an address to receive bitcoin into. You can then show the QR code to your trade partner to scan with their phone, or press the “bc1…” part to copy the address to your clipboard, and paste it to your trade partner. They can then pay to this address, which you can think of as being “under your control”.
Buying bitcoins in a private fashion
Note if you want to do this in a more private way without KYC (Know Your Customer), you will pay a premium over the spot price (approx 3-6%). This privacy premium can easily be worth it over the longer term. Look into the following no KYC exchange services or methods:
- Family/Friends network
This may be the most private option to acquire bitcoin without KYC. You may have to offer a slight premium for your family/friend to make it worth their while. Essentially, you would trade them cash, and open up your Samourai Wallet, and display a receive address / QR Code. They scan with their wallet and send to you.
Hodlhodl is an online platform that does not hold bitcoins itself, but rather facilitates bitcoin trading. Create an account as you normally would, then browse the offers page, filter it to AUD and select an offer (or create an offer). Depending on the offer type, you will generally use either bank transfer, cardless cash withdrawal, or meet up in person to exchange cash. The hodlhodl platform makes use of escrow to hold the bitcoin during the trade. When setting up your profile and trade, you input the ‘receive’ address from your Samourai Wallet listed above. Then, your bitcoin is released to you once the other party has confirmed that your payment went through.
Buying bitcoins in a non private fashion
Two Australian services:
With these services, one advantage is that you can set up an account, and buy like a normal stock exchange operates. You can also make use of AutoTrader or DCA (Dollar Cost Average) features to regularly purchase bitcoin.
Note these services do require KYC checking and will be liable to reporting your trades to the Australian government (e.g. AUSTRAC, ATO).
Further research and steps to take:
- Running your own node – see Why Should I Run a Bitcoin Node?
- Running your own Samourai back end server (Dojo) – see the Ronin Dojo article by Ketan
- Setting up a hardware wallet for cold storage – listen to the SLP Hardware Wallet Interview series
- Generally, you want to periodically flush out some of your bitcoin from your phone wallet to your hardware wallet
- Backing up your 12/24 word seed on a steel device e.g. CryptoSteel, Billfodl, CypherWheel
Lastly, consider attending a Ministry of Nodes webinar, where we can answer questions you have and walk through holding your private keys.