Offline signing for bitcoin transactions with Electrum

Written version:

Let’s begin this tutorial by creating a new wallet on our offline machine. We will then transfer some bitcoins to this wallet from an exchange. Electrum generates a seed for us which we should write down in a safe place. After that Electrum wants us to provide the seed once more in order to make sure we have saved it.

Next we’ll give our wallet a password, so that other people cant use it without knowing the password. For some reason Electrum crashes on our machine every time after this step, but it doesn’t really matter. We’ll simply reopen it, and continue from there.

Now we’ll go to the receive tab in order to get an address that we can provide to the person or exchange that sends us some bitcoin.

After that it’s time to create the watch only wallet on the online computer. Go to “wallet” –> “master public keys” and copy the key to the clipboard. We’ll attach a usb stick to the computer, and paste the public key into a text document. Then we’ll remove the stick and bring it to the online computer.

On the Electrum installed on the online computer, we’ll go to “file” –> “new/restore”. Let’s give this wallet a name and hit “ok”. Then we’ll select the option called “restore a wallet or import keys”.

Now we’ll open up our text file and copy paste the public key from there. Let’s select auto connect and move forward. Electrum will now synchronize the wallet and show us it’s balance.

Now it’s time to create the transaction. Go to the “send” tab and enter the address to which you want to securely send your coins. Then enter the amount, hit send and accept the fee.

Then we’ll save the unsigned transaction to our memory stick in order to transfer it to the offline computer. There we will load the transaction into Electrum for signing it, by going to “tools” –> “load transaction” –> “from file”. Now let’s navigate to our memory stick and select the transaction file we created on the online computer. Then we’ll simply hit sign, and provide our wallet password. Electrum signs the transaction, and we can save it to the usb stick.

Now we can transfer the signed transaction to the online computer. There, we’ll select tools, load transaction, from file. Choose the signed transaction file and click broadcast. Electrum sends the transaction and informs you that the payment has been sent. After the transaction has been confirmed in the blockchain, our balance updates.

That’s it! Thanks for watching and see you next time on FasterTutorials.com!

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