Setting up your first wallet: step by step

With your own wallet, you hold your keys yourself – and you’re responsible for them. This guide shows the seven screens you’ll come across in almost every smartphone wallet, and what to watch out for on each one. Take your time: we’ll walk you through every screen, at your own pace.

Before you start

• 20 to 30 minutes of quiet, with no onlookers and no cameras in view.
• Pen and paper, ideally a sheet used only for this.
• A smartphone with an up-to-date operating system and a screen lock.
• A small test amount, around $20, that you can receive from an exchangeTermExchange (crypto exchange)A trading platform where buyers and sellers trade bitcoin with each other via an order book.On the learning path: Stage 4 · Step 2 – Choosing a provider →In the glossary →AdLicensed providers with a paid linkProviders from our comparisonKrakenExchange · MiCA (Central Bank of Ireland)Visit Kraken* (paid link, opens in a new window)BitvavoExchange · MiCA (AFM, Netherlands)Visit Bitvavo* (paid link, opens in a new window)CoinbaseExchange · MiCA (CSSF, Luxembourg)Visit Coinbase* (paid link, opens in a new window)All 7 compared – including non-partners →*Paid link: if you sign up or buy through it, we earn a commission. Your price stays the same. How we make money →18+ · Crypto assets are highly volatile; you could lose all your money. No deposit protection.× or a friend.

Which app suits you, and when a hardware walletTermHardware walletA small dedicated device that keeps your private keys offline and signs transactions internally.On the learning path: Stage 6 · Step 1 – Hardware wallets compared →In the glossary →AdManufacturers with a paid linkProviders from our comparisonBitBox02Hardware wallet · SwitzerlandVisit BitBox* (paid link, opens in a new window)Trezor SafeHardware wallet · Czech RepublicVisit Trezor* (paid link, opens in a new window)Blockstream JadeHardware wallet · Canada/USAVisit Blockstream Jade* (paid link, opens in a new window)All 6 compared – including non-partners →Only buy hardware wallets from the manufacturer or an authorised reseller.*Paid link: if you sign up or buy through it, we earn a commission. Your price stays the same. How we make money →× makes more sense, is covered in Types of wallet. Only download the app from the official app store or via the project’s website – never via a link in an email, text message or chat.^[5]

Setting it up in seven screens

The screens show a made-up ‘Example wallet’. Real apps look different, but the steps are almost the same everywhere.

The seed phrase: writing it down and confirming it

Anyone who knows the words can move your bitcoin from any device. If both the phone holding the private key and the seed phraseGlossarySeed phrase (recovery phrase)A sequence of usually 12 or 24 words from which your wallet derives all its private keys. Anyone who knows the words has full access to your bitcoin – so they belong in an offline backup and never in anyone else’s hands.On the learning path: Stage 5 · Step 3 – Backing up your seed phrase →In the glossary →× are lost, you can no longer get at your bitcoin.^[4]

Beginners often just take a screenshot or save the words on their phone.^[2] Instead, write each word with its number on paper, in block capitals, and check the spelling twice.

Some apps let you start with just a PIN and do the backup later.^[3] Back up the words anyway before you receive your first payment.

Often the app then asks you for the words in the right order.^[2] This checks your note, not your memory: read from the paper and correct the sheet straight away if you spot a mistake.

How to store the words for the long term is explained in Backing up your seed phrase. You don’t need an additional passphraseGlossaryPassphrase (the ‘25th word’)An extra word of your choice added to your seed phrase. The same words then produce a completely different wallet. This protects you if someone finds your words – but if you forget the passphrase, access is lost for good.On the learning path: Stage 5 · Step 3 – Backing up your seed phrase →In the glossary →× to begin with; more on that in The passphrase.

Checking the address and sending a test amount

Under ‘Receive’, the wallet shows a Bitcoin addressGlossaryBitcoin addressA string of characters like ‘bc1q…’ that someone can send bitcoin to. It is usually derived from a public key, can be shared without risk to your funds and should be generated afresh for every payment.On the learning path: Stage 5 · Step 4 – First withdrawal →In the glossary →×, usually beginning with ‘bc1’. It is public and can be shared.^[6] A new address for each payment makes it harder to link your payments together. The whitepaper already recommended this; modern wallets do it automatically.^[7],[6]

Addresses contain a checksum that catches typos.^[8] It doesn’t help against deliberate swapping: malware can replace a copied address without you noticing.^[6] Scammers also send tiny amounts from deceptively similar addresses so that you later copy the wrong one from your history.^[5] So compare the address pasted at the sender’s end in full with the one in your wallet, and send a small amount first.

Many wallets show amounts in satsGlossarySatoshi (sats)The smallest unit of Bitcoin: 1 satoshi (‘sat’ for short) equals 0.00000001 BTC, so one bitcoin consists of 100 million sats. The unit is named after Bitcoin’s creator, Satoshi Nakamoto.On the learning path: Stage 1 · Step 4 – Sats & units →In the glossary →×; at the moment, $1 is roughly 1,169 sats. After sending, the payment first shows as ‘unconfirmed’. New blocks are found roughly every 10 minutes on average.^[7] As soon as your payment is in a block, it has its first confirmationGlossaryConfirmationA transaction has one confirmation as soon as it is in a block; each further block adds one. With every confirmation, it becomes harder to displace the payment after the fact.On the learning path: Stage 5 · Step 4 – First withdrawal →In the glossary →×. How to send bitcoin from an exchange to your wallet is shown in Your first withdrawal to your own wallet.

Practise recovery once

While only the test amount is in the wallet, you can rehearse recovery without risk: delete the app or use a second device, choose ‘Restore wallet’, type in the words from your sheet and check whether the test amount reappears. Only type the words into the wallet app, never into a website or a form.

If it doesn’t work, you’ve found a mistake before it costs you money. Other ways to check, and help if the wallet looks empty afterwards, are in Testing recovery.

When the amount grows

Your app wallet is the everyday purse. For savings you’d hate to lose, a hardware wallet is the usual next step. Its keys stay on a dedicated device and never leave it. Buy it directly from the manufacturer or from a retailer the manufacturer names. Setting up a hardware wallet shows how the setup works.