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Next: How Bitcoin Works
In this chapter, we will install the Exodus wallet app, learn how to purchase a small amount of bitcoin, and send it directly to our new wallet. We will take personal responsibility for it by backing up the wallet and keeping it secure. We will then set up a second wallet app, Muun wallet, and move on to see how to send and receive bitcoin between our wallets over the Bitcoin peer-to-peer network. How this apparent magic works behind the scenes will be explored in the next chapter.
Let’s get going because then we can own a tiny fraction of the 21 million Bitcoin that will ever exist.
In its most common form, a Bitcoin wallet is a software application. Typically, it will show you how much bitcoin you have and enable you to send it and to receive it from other people’s wallets. The sending of Bitcoin will always involve a software application, but as we will now learn, the narrower act of receiving and storing your bitcoin can be fulfilled in other ways. What follows is a summary of the types of Bitcoin wallets, some information about them, and a few pros and cons for each type.
Before we dive into the wallet types, it is essential to realize that the idea of a bitcoin wallet is just an abstraction of reality. No Bitcoin wallet holds any bitcoin at all. All the bitcoin that exists and will ever exist is on the Bitcoin network. The software known as a wallet reads the network and identifies what belongs to the wallet user via their private cryptographic keys – which are stored on the user’s device by the wallet app.
The range of Bitcoin wallets stores your access to the bitcoin on the network that belongs to you. This is achieved through public and private key pairs, as we discussed in Chapter 3: Cryptography and the Cypherpunks. You hold the private keys, identifying the public keys, which are Bitcoin addresses. To explain further, your Bitcoin addresses (public keys) are generated from your private key. A private key can generate many Bitcoin addresses, and reversing the process to glean the private key from an address is impossible. Therefore, Bitcoin addresses can be safely shared, although some privacy implications will become apparent as we continue our discussion.
Most Bitcoin wallets can hold multiple private keys, and many can handle numerous cryptocurrencies. That is a slightly simplified explanation, but you will fully understand it by the end of the next chapter. For now, it’s worth getting to grips with the different wallet types before we start using wallets in the next section.
I will reiterate this next point several times throughout this chapter and the rest of the book, but this is a crucial learning point:
If someone knows your private key, they can control/spend/steal all your bitcoin from anywhere on Earth and, one day, perhaps, the universe, with an Internet connection. Therefore, you must keep your private keys private! Also note, we will soon introduce the concept of a seed phrase or mnemonic phrase. This, for now, can be thought of synonymously as the same thing as a private key and should be guarded with the same attention.
Now we can look at the different wallets, including how they help you protect your private key(s).
Hot wallets are connected to the Internet via a desktop computer, laptop, or mobile device. Sometimes they are standalone applications, and sometimes they might work with other software like a Web browser. If a wallet is connected to the Internet, it is less secure than one that isn’t. This is obvious; if it is on the Internet, it could be hacked or tracked by a keystroke logger, or your entire OS might have been hijacked. To be clear about this – the Bitcoin network can’t be hacked, but your private key has the potential to be revealed/stolen, just as any data on any device might be.
To give a sense of perspective, it is not likely that your keys will be compromised and your bitcoin stolen; how often have you been hacked in the past, for instance? It is just essential to know it is a possibility. The much more common danger to your private key is a phishing attack that fools you into thinking you should reveal it. There is never a need to share your private key with anyone.
If you store the same amount of money, you would typically keep cash in a regular wallet in your pocket; this might be about the right level of risk for a hot wallet. If, on the other hand, you store your wages, college fund, or life’s savings in bitcoin, then a hot wallet is likely a little reckless.
As we will see, hot wallets are arguably not the most insecure as they are better than leaving your bitcoin on a centralized corporate-run exchange that can be hacked or become insolvent. The trade-off for the insecurity of a hot wallet is that you can take it with you or have it at your fingertips, ready to send bitcoin or share your public address most easily.
Paper wallets are 100% un-hackable – electronically speaking; they are a piece of paper that contains your private key for making transactions and your public key for sharing with somebody who wants to send you bitcoin. The keys are often in the form of a QR code that can be scanned. Note that you can receive bitcoin when you share your public key and remain 100% un-hackable; however, as soon as you scan your private key to spend some bitcoin, the application you are using is then the same as a hot wallet. So paper wallets are suitable for long-term savings. A critical point that might be obvious but is so important I will bring it up anyway is that paper can be seen and photographed or copied; it can burn or be destroyed by water, too.
If someone copies or steals your paper wallet, they can access all your funds. If your paper wallet is destroyed and it is the only copy, your funds are lost forever! Paper wallets are often laminated and stored in a fireproof safe in a discrete place.
A Bitcoin paper wallet
The preceding image is a paper wallet. The QR codes and the text of the private and public keys have been altered to make them unusable. You can see the Bitcoin address in QR and text format on the left for receiving bitcoin. Because the Bitcoin network is entirely public, you could read the address’s contents (had I not altered it) or send bitcoin to it from the public key. If you try to send bitcoin to the address on the left, your wallet software will likely detect that the format is invalid. If your wallet allows you to send bitcoin to the address, it will be lost forever. So don’t send bitcoin to the above address. You can see the private key on the right in QR and text format. Had I not altered it, you could spend all the bitcoin held in the public address using almost any hot wallet.
Hardware wallets generate and store your private keys and can sign transactions. This means that your private keys never need to be on an Internet-connected device and are, therefore, not hackable over the Internet. Anyone wishing to steal the bitcoin for which the private keys are on a hardware wallet, and only a hardware wallet, will need to steal the device itself and gain access to it via its PIN or password. As I implied, if you store your private key in a hardware wallet and a hot wallet, the hardware wallet offers no extra security beyond what the software wallet offers. If you use a hardware wallet, don’t use the same private key in a hot wallet. Here are two standard hardware wallets that are available at the time of writing.
Ledger and Trezor hardware wallets
Choosing a hardware wallet is nuanced and subjective as they range widely in price, features, and ease of use. The two pictured above are Ledger (on the left) and Trezor (on the right). These are my two favorites. Ledger is cheap and easy to use. Trezor is a little more expensive and clunky to operate but has the advantage of using open-source software that has been widely scrutinized.
If you decide to dive deeper down the Bitcoin rabbit hole, you should read and watch reviews of hardware wallets, make a choice, and purchase your favorite. Do so directly from the manufacturer before buying a significant amount of bitcoin to ensure you are not being sold a compromised device. Never buy second-hand on sites like eBay or from random sellers on Amazon. It will almost certainly be a scam.
In this book, we will buy $10 worth of bitcoin. I assume you are financially prepared to risk losing $10 if something goes wrong. Please only proceed if this is the case. Suppose you decide to hold a significant amount of bitcoin one day; in that case, you should research and choose a hardware wallet, set up the associated application, and keep your bitcoin private keys on the hardware wallet. What counts as a “significant” amount will differ for every reader. A good rule of thumb is that if it is too much to carry around as cash in your back pocket, it should be on a hardware/cold wallet, not a hot/software wallet.
Multi-signature or MultiSig wallets can be hot or cold, requiring two or more private keys to send a transaction. Using MultiSig wallets is beyond the scope of this book, and it is recommended that you become proficient with the basics of Bitcoin before venturing into this field. It should be noted, however, that securing your bitcoin with multiple signatures requiring more than one private key, provided you trust all the holders, is the most secure.
There are many wallets of each type to choose from, varying in complexity, features, and price. Next, we will explore a simple, reliable, reputed wallet called Exodus. However, Exodus is not a hardware wallet. It is a hot wallet. Please don’t put your pension fund in it.
A seed phrase, or mnemonic – pronounced nem-on-ic recovery phrase, is a sequence of words used to create or recover a cryptocurrency wallet/key pairs. It consists of 12 or 24 randomly generated English words that can be used to restore access to the wallet with its key pairs in case of loss, damage, or theft of the device or the login credentials.
A seed phrase is mathematically generated for us when we create a new cryptocurrency wallet. We must always write down the seed phrase and keep it in a secure place, preferably offline, such as a piece of paper or a hardware wallet. The hot wallet software uses the seed phrase to generate our private key, or in the case of a hardware wallet, the seed phrase is generated entirely offline on the hardware wallet device.
Most of the time, we never need to see our private key(s). This is because a seed phrase can mathematically derive multiple private keys, and as we learned in the previous chapter, the private keys can each derive numerous public keys. Furthermore, generating private keys from a seed phrase is deterministic; therefore, knowing the seed phrase will always return the same private keys. It blows my mind how clever this is every time I think about it.
The seed phrase acts as a backup that can be used to restore the private keys if we lose access to a device or want to set up the same wallet with the duplicate private keys on another device. Therefore, the seed phrase is access to all our funds held by the derived private keys.
In the early days of crypto, users would be required to record the long string of hexadecimal digits that was the private key. Mnemonic seed phrases are a fantastic development that avoids this inconvenience.
This new knowledge about seed phrases enables the introduction of another type of crypto wallet called a brain wallet. A brain wallet is where the seed phrase, and therefore, the private keys, are not recorded anywhere except in your memory. Using a mnemonic phrase comprised of 12 or 24 English words is much easier to remember than a long string of hexadecimal digits – although still challenging. This will be impossible to hack until science can read human thoughts but has the obvious danger that your money is untouchable if you forget the phrase. You can use mental strategies to remember your seed phrase.
For example, consider the following: Once upon a time, there was a tech-savvy individual named Bob who decided to invest in Bitcoin. Excited about their new venture, Bob diligently researched wallet security and discovered the importance of mnemonic phrases.
To ensure the safety of their Bitcoin, Bob generated a unique 12-word mnemonic phrase. Determined to remember it, Bob came up with a story that used the words.
The mnemonic phrase was: “elephant banana taco spaceship monkey unicorn rainbow pizza dragon laptop.”
Bob imagined an elephant wearing a banana hat while eating a taco. Suddenly, a spaceship piloted by a monkey and a unicorn appeared in the sky, creating a rainbow. Out of nowhere, a pizza-loving dragon flew by, carrying a laptop.
Whenever Bob needed to recall the mnemonic phrase, they simply pictured this ridiculous scenario. The vivid mental image not only made them chuckle but also ensured they never forgot the order of the words.
For people of regular intelligence, like me, using a brain wallet is a skill that can be practiced as a backup to other methods of securing your seed phrase.
I chose Exodus because it is easy to use, has a good reputation, works on most platforms, and enables multiple options in multiple countries to buy Bitcoin and have it sent directly to your wallet. Therefore, your bitcoin is never stored on an exchange that could fail, lose your bitcoin, or even, as has happened more than once, steal your bitcoin. The whole point of Bitcoin is that it is self-custody. Of course, Exodus is one of many wallets, but I had to pick one to do the following tutorial.
Visit https://www.exodus.com/download/, and you will see three options for downloading the Exodus wallet. First, there is a version described as a Web3 wallet. This is a browser extension for either Chrome or Brave browsers. There is also a version for desktop and mobile devices. This tutorial will focus on the desktop version, but the steps are nearly identical should you prefer the mobile version for Apple or Android devices. The Web3 version is unsuitable for this tutorial and has a few setup and operational differences, and I recommend not using this version at this stage of learning about crypto.
Suppose you are curious about the Web3 wallet. Web3 refers to the ecosystem of distributed applications dApps for interacting with crypto, of which Bitcoin is not a part– yet, at least.
At the time of editing, the Stacks ecosystem is rising in popularity. Stacks allows you to use your bitcoin in decentralized finance activities. However, it involves locking your bitcoin in a wallet controlled by someone else and using their receipt tokens. A future version of the book might include coverage of Stacks, but we will skip over this possibility for now.
Should you wish to run the Exodus wallet on both desktop and mobile, you can do so by first completing this following tutorial and then installing the mobile version of Exodus and reusing the seed phrase you will generate in this tutorial. You will then have a wallet on your desktop and mobile, which is synchronized.
Installing the Exodus wallet
Let’s get going and create our wallet and secure the seed phrase.
- Click the Download Exodus link for the desktop version appropriate for your operating system.
- When the download is completed, run the downloaded file.
- Once the installation has been completed, run the app as usual for your operating system.
- You will be greeted with the Exodus home screen, called the Portfolio, which looks like this next image.
The Exodus wallet home screen
On the Portfolio screen, you can view the top cryptocurrencies’ current prices and see your balances, which will be zero now. At the top of the Portfolio screen, you are prompted to either Make Your First Deposit or Restore from Backup.
We could buy some bitcoin and send it to our Exodus wallet. But let’s say you send a significant amount of bitcoin to your Exodus wallet, and then your device breaks down or gets stolen. If this happens, you will lose everything. Nobody can assist you. Exodus can’t help; buying a new device and reinstalling Exodus won’t get your bitcoin back, and no crypto expert can recover your Bitcoin. We must create a recoverable backup and secure the app in case the device is lost, stolen, or malfunctions.
Setting a password and recording the recovery phrase
Setting a password and recording the recovery phrase is part of the same process. The Exodus app won’t let you do one without the other. Note that the password is just for the app. You can install Exodus on as many devices as you like and choose a different password for each installation. You could then use the recovery phrase with each installation to access your bitcoin. Therefore, forgetting the password will be inconvenient, but if you forget your recovery phrase, your bitcoin is gone forever!
- Click the Settings icon in the top right corner of the app, then select the Security tab.
- Click Backup your wallet to enable this feature.
You will see a rather stern but essential warning.
The Exodus password warning
It is vital to heed the warning and ensure you record your password or are sure you will remember it, as it can never be recovered.
- Type your password in the appropriate field and click NEXT.
- On the next screen, the app asks you to repeat your password to check if you have recorded or remembered it. Retype your password, click NEXT, and you will see the following message.
View the secret phrase
- The step we must perform is to record our secret phrase. This mnemonic phrase is a mathematical marvel that allows the software to generate multiple public and private key pairs for you on various blockchains. All you need to do is remember the mnemonic phrase, and Exodus or many other similar applications will find and manage your bitcoin and many other cryptocurrencies for you. That’s why keeping it secret is so important. Get a piece of paper and a pen, make sure you are not being watched, and click the VIEW SECRET PHRASE button to reveal the secret phrase shown obfuscated (by the Exodus app) next.
Write down your secret phrase.
- Hover over to reveal and record each of the twelve words. The order matters and each word must be recorded accurately, or you cannot recover your wallet. Double-check that you have written the secret phrase correctly, then click DONE.
- A question-and-answer check follows where the Exodus app will attempt to confirm that you have written down your secret phrase correctly. Note that the question asked is not fool-proof, just a cursory check of one of the positions of one of the words. I expect this is just in case a user didn’t bother. For example, I was asked to verify the accurate recording of the 5th word of my phrase. I have obfuscated the image to guarantee the security of my wallet. I will emphasize again; you need all the words correctly ordered to recover your wallet. Click the answer to the question you are asked and then click DONE.
Check the secret phrase.
- You are done. Go and store your password and seed phrase somewhere secure. A hidden fireproof safe is ideal. You can keep more than one copy of your seed phrase, perhaps in another building or a different floor of the same building, or with another person if you are confident that they are 100% trustworthy.
Congratulations your wallet backup is ready to use, and your password securely locks the app.
It is essential to state again that the password only secures access to the app! However, the app remembers your seed phrase for you. Therefore, if somebody finds your seed phrase, they can use it in almost any wallet app to take all your funds. Try this out by downloading the mobile version of Exodus, selecting Recover an existing wallet, and entering your seed phrase.
You can test the password feature by closing Exodus, rerunning the app, and notice that you will be asked to enter your password.
How to get some bitcoin
There are many places we can buy Bitcoin. One of the reasons I chose to introduce you to the Exodus wallet was because it has a built-in option to purchase various cryptocurrencies, including bitcoin.
I strongly recommend starting with only a minimal amount of bitcoin because you may lose it if you make a mistake. The next problem is that Exodus and its partners charge a fee for buying bitcoin. When writing, it is between 2 and three US dollars. So if you only buy 10 US dollars worth of Bitcoin, this fee is very high as a percentage (20 to 30 percent).
Once you are confident with the process and have thoroughly researched bitcoin, should you decide to buy more, the fee will be less significant as a percentage. Therefore, getting experience before risking substantial money is worth the uneconomical cost.
Moreover, there are issues regarding the availability and legality of different exchanges in various countries. So I wanted to keep it straightforward, wherever you are.
The conclusion I came to was to suggest you let Exodus have their extortionate profit just this once while we are learning about Bitcoin.
Buying some Bitcoin
This section will show how we can use Exodus and its partners to buy some bitcoin. Note that buying bitcoin is not the end of the matter. We will also automatically receive the bitcoin in our wallet. Exactly how this apparent magic happens behind the scenes will be explained in Chapter 5: How Bitcoin Works.
To prepare for this tutorial, you will need some ID and a credit or debit card with enough credit to buy a small amount of bitcoin. For example, I will spend 10 British pounds. In the UK, a passport was sufficient for my ID.
If you cannot risk losing money, you can still follow along with the rest of the book and return to buying bitcoin another day.
Let’s buy some Bitcoin!
- Start the Exodus app and log in.
- Click the Buy Crypto button in the top center of the app. This is shown in the following image.
Click the buy crypto button
- Observe the screen where we will buy some bitcoin. I have annotated the following image to make the next steps as straightforward as possible.
Choose the amount of bitcoin.
- Choose your nation and currency in the drop-down selector labeled 1. I have selected British pounds (GBP). In the drop-down selector labeled 2, make sure BTC (Bitcoin) is selected. If you buy anything other than Bitcoin, then the tutorials in the rest of this chapter won’t work.
- In the amount field labeled 3, type a value of your currency you are comfortable losing should something go wrong. I suggest an amount approximately equivalent to 10 US dollars. As you can see in the image, I chose 10 British pounds.
If you cannot risk losing money, you can still follow along with the rest of the book and return to buying bitcoin another day.
- When you are comfortable with your selections, click the Continue button, and the next step will open in your web browser. This screen might vary from the following image depending on the partner Exodus uses in your country. The important thing is to confirm the details of the transaction before you proceed. The following image is annotated so I can quickly point out a few pieces for you to compare and consider with your details.
Exodus ramp details screen
- In part 1 of the preceding image, you can see the number of units of your nation’s currency that will be debited from your bank account. In part 2, you will see the tiny fraction of a bitcoin you will receive. In part 3, you can see a breakdown of the fees you are being charged. Note that this is not on top of the amount you have chosen to pay – instead, it is subtracted from the amount of bitcoin you would have received if this was a free service. The fee is broken down into two parts. In my case, the charge from the Exodus partner – Ramp is much larger; the much smaller cost is the amount the Bitcoin network charges for Ramp to send the bitcoin from their wallet to yours. Take some time to review the details before proceeding.
- When you are satisfied that everything is correct, click the PROCEED button. You will be asked for your email address to accept the terms and conditions and optionally sign up for newsletters. When you are ready, click PROCEED.
- You will be asked to confirm your email address by entering the code Ramp will send to your email address. Enter the code. You will now be asked to verify your Bitcoin address. This will be important, although it should be auto-filled for you, as shown in this next image.
Ramp auto-filled Bitcoin address.
- You could probably click CONFIRM AND PROCEED with reasonable confidence of success but let’s see how we can be 100% sure the address is correct first. If the Bitcoin is sent to the wrong address, it will be impossible to recover, and Exodus/Ramp will not take any responsibility for your loss. Navigate to the Exodus app. Be sure not to close the web browser or click the back button in the web browser; this would likely cancel the transaction. Click on the Portfolio button in the top portion of the Exodus app, as shown in the following image.
Click portfolio button
- On the Portfolio screen, find the Bitcoin entry shown in the following image; it is probably above all the other cryptocurrencies, and click on it.
Exodus bitcoin entry
- Now click on the RECEIVE button and observe your Bitcoin address. Mine is shown below. Yours will be completely different characters apart from the bc1… at the start.
Exodus bitcoin address
- We need to check that the address that our purchased bitcoin will be sent is the same as in your Exodus wallet. You could check the full address, which would be awkward and error-prone. Instead, I will select four numbers from the end and four from the beginning. Also, note that all modern Bitcoin addresses start with bc1… so I exclude the bc1. This makes my Bitcoin address start and end characters as follows. qzgf…ghgv. Now compare your start and end characters to the address that your bitcoin will be sent. You can see from the previous images that my bitcoin is being sent to the same address as my Exodus wallet.
Please do not make the mistake of comparing my address in the image to your address. Your address will be very different – that doesn’t mean it is wrong. If the address your bitcoin is being sent to is the same as the Bitcoin address you retrieved in steps 12-13, you are good to continue. If the addresses don’t match up, the correct address is the one you saw in step 12 when you clicked the RECEIVE button. You can click on your address in the Exodus app to copy it and then paste it into the Your Bitcoin (BTC) address field in your web browser. Note that something probably went wrong if you need to do this step. Consider closing your web browser to cancel the transaction and starting again.
- When you are confident the bitcoin is being sent to the same address as your Exodus wallet, click the CONFIRM & PROCEED button in the web browser.
- Next, you will be given options for how you want to pay. They will vary depending on your nation, and you need to consider what services your bank provides you. The most straightforward option, and the one I chose, was Card. Make your choice and click PROCEED. What follows is the process of registering your credit card. This is the same as any other online retailer you might have signed up for in the past, and I have not documented the steps for privacy reasons. Furthermore, depending on the laws in your country, you might need to verify your identity with an ID verification process.
- Check the annotated image below. On the Portfolio screen, click the Portfolio tab (1) above the list of cryptocurrencies, as shown in the following image. Notice that once the process is complete, your Bitcoin balance can be seen (2). I have 0.00041509 bitcoin. This process could take between a few seconds and a few minutes. Your Bitcoin should be spendable in around ten minutes. The details behind this are explained in the next chapter. As a quick explanation, the delay is the time the Bitcoin network takes to finalize the transaction and make it a permanent part of the blockchain.
Your bitcoin has arrived.
- Why not take a little time to explore some of the features and screens of the Exodus app, as it will help familiarize you? The app features you might like to look at include the Wallet tab to view your new balance and the History button (in the top right of the screen) to see a review of transactions you have made.
Congratulations, you are the owner of some bitcoin. Nobody can take it from you (without your secret seed phrase and the derived private key). Nobody can reverse the transaction or stop you from spending it. However, Bitcoin transactions are not private. More on all these ideas in the next chapter, How Bitcoin Works. The ID verification process might have been awkward, but you only need to do that once for each platform you want to use. If you purchase through Exodus via Ramp again, it will be faster and smoother. Furthermore, we didn’t get a good deal on our bitcoin this time, but if we buy more in the future, we can buy a more viable, cost-effective amount. In Chapter 8: Trading on Centralized Exchanges, we will see how to purchase bitcoin and other cryptocurrencies for a fraction of the fees of Exodus/Ramp.
Sending and receiving bitcoin
Let’s learn how to send and receive bitcoin. There are many ways to approach this. If you have a friend or family member, they could create a wallet with Exodus. Or you could create a new Exodus wallet on your mobile device with a new seed phrase. Another option is to use the Exodus portfolios option to allow you to manage multiple portfolios with one seed phrase and then send Bitcoin between portfolios. This might be something you want to explore, perhaps to differentiate between long-term and short-term investments. You can try the Exodus portfolios options by clicking Settings – Enable Portfolios. Yet another option is to create another wallet on the desktop version of Exodus with a new seed phrase. However, this last approach would mean you would constantly be entering different seed phrases to swap between wallets, which is cumbersome. So the path we will take in this following tutorial is to create a new wallet, with another wallet app, on a mobile device.
We will use Muun – pronounced moon. It is a mobile-only wallet but will run on Android or iPhone. It is a wallet specific to and only for Bitcoin. Like Exodus, Muun is a hot wallet and is not meant for significant amounts of bitcoin to be stored on it. Remember to treat it like a regular wallet/purse, and don’t put more bitcoin into your Muun wallet than you would cash into a regular wallet.
If you want to read more about Muun wallet, head to https://muun.com/. Muun is designed to be short on features and, therefore, easy to use and also provides seamless access to the Lightning network. We will discuss the Lightning network in the next chapter.
Installing Muun wallet
This is so straight forward it doesn’t need a tutorial. You can search for Muun on the Apple App Store if you have an iPhone or iPad or search Google Play if you have an Android phone/tablet. Alternatively, visit https://muun.com/ and click the App Store or Google Play link. This next image shows the Muun application on the Google Play store.
Muun wallet on app store
Notice on the app page and highlighted in the image above that the company is Muun. This means this app is provided by Muun and is not a fake app designed to steal your Bitcoin. Install the Muun wallet the same way you install any app on your mobile device, and then we can step through the setup process before sending some bitcoin from Exodus to Muun.
Setting up Muun wallet
Maybe I am a little simple-minded, but I get a thrill whenever I send bitcoin to someone. It is because of a sense of freedom. I am not asking the bank to do it, I just decided to do so, and nobody can stop me. However, just as sending a small amount of bitcoin is a bit of a thrill but sending a large amount of bitcoin still provokes a slight sense of unease – for the same reason – nobody can stop me, and nobody shares any responsibility for it going wrong. If I get it wrong, the bitcoin is gone! The bank won’t care, and I can’t ring the Bitcoin Co. LLC or Nakamoto Enterprises – they don’t exist, and even Muun or Exodus will not share any responsibility whatsoever.
With this in mind, let’s set up Muun wallet and take the trouble to make a reliable backup.
- Open the Muun app by tapping the Muun icon on your device screen. You will see the Muun starting screen shown in the following image.
Muun start screen
- Click the CREATE A NEW WALLET button at the UI’s bottom.
- You are prompted to create a PIN on the next screen. Note that this secures access to the app; this is not the same as the seed phrase we will see soon. If your seed phrase falls into criminal hands, your funds can be stolen without knowing the PIN. When prompted, enter your PIN to confirm it. Congratulations, you now have a Muun wallet. Click LET’S GO, and we will proceed.
Muun wallet, let’s go
- The main Muun wallet UI will now greet you. You might notice how clean and uncomplicated it is compared with Exodus. Notice that in the center of the UI, underneath the SEND and RECEIVE buttons, there is a prompt to Back up your wallet. Click Back up your wallet, as shown in the following image.
Muun, back up your wallet
- In the next screen labeled Security Center, click Back up your wallet.
- You are now faced with a choice of methods to back up your wallet. Muun prompts you to use an email and password to back up your wallet. If you choose this method, you will be guided through a straightforward process, and the folks at Muun wallet will hold your backup details, and you will be able to retrieve them using an email and a password. If you only ever put small funds in this wallet, you could say it doesn’t matter and use the email backup method. I encourage you to get used to self-custody of all your crypto, which is what this tutorial will proceed with. At the bottom of the UI, as indicated in the following image, click I DON’T WANT TO USE MY EMAIL.
Don’t use email
- When asked, are you sure you don’t want email recovery click, I’M SURE.
- As shown in the following image, click Create an alternative backup
Muun create an alternate backup
- Click START to reveal your recovery code and copy it to a piece of paper, then click Continue.
- Retype your recovery code in the next screen to verify that you have recorded it correctly. This is boring but worthwhile. I prefer a full check like this to a partial one like Exodus.
Muun, confirm your recovery code
- When you have typed the recovery code click CONTINUE.
- Be sure to read the next reminder and click the checkboxes to confirm that you understand that you alone are responsible for securing the recovery phrase.
Muun confirms user responsibility.
- Click FINISH, followed by EXCELLENT.
Congratulations your Muun wallet is ready to use and can be quickly recovered if you lose your device, decide to install Muun on another device, or uninstall the app for some reason. Note that this recovery code is in a different format from the code used by the Exodus wallet. Therefore, it can only be used in the Muun wallet app.
Sending bitcoin from Exodus to Muun wallet
Now for the fun bit. Open Exodus on your desktop and Muun on your mobile device, entering the Exodus password and Muun PIN as required. If you installed Exodus on mobile, these instructions should be easy to interpret. If your Muun wallet is still open from the setup tutorial, you can click the Wallet icon at the bottom to return to the same screen you would see had you just started the app.
- In the Muun wallet app, click the RECEIVE button. On the Receive screen shown in the following image, notice two tabs at the top of the screen. One tab says BITCOIN, and the other says LIGHTNING. Select the BITCOIN tab.
Muun receive bitcoin
- We must share the Muun wallet address shown in the image with our Exodus app. If you click the COPY button and paste the address into an email to an email address, you can access it on your desktop. If you had been sharing the address with another mobile device, you could have let the wallet app on the other device scan the QR code. This is great for sending to other Bitcoin users.
- Copy the Muun wallet Bitcoin address from the email when you receive it on your desktop. Be careful not to add any extra spaces or characters at the start or end of the address, although Exodus should warn about any wrongly formatted addresses.
- From the Exodus app’s home screen, click the wallet icon, followed by the Bitcoin entry in the list of cryptocurrencies. Next, you will see your bitcoin holdings. Mine has decreased in value compared to the US dollar since I wrote the Exodus tutorial and purchased £10 worth of bitcoin.
Send bitcoin from Exodus to Muun
- As highlighted in the image above, click the Send button.
- In the next screen, paste your Muun wallet address into the Send to Bitcoin address field. Click the Half button to send half your bitcoin to your Muun wallet. Note the green check mark at the end of the address showing that the format is correct. Note that it is still possible for you to enter the wrong address. The green checkmark confirms that the address is valid, not that it belongs to you. All the information from this step is shown in the following image.
Paste Muun wallet address into Exodus
- You are ready to send the bitcoin, but before you do, check the details underneath the address and amount details. The following image shows the fee that will be charged by the miner that wins the block – in my case, 0.43 dollars worth of bitcoin, and how much the remaining Bitcoin will be worth in dollars. Note that the fee is in addition to the amount you are sending. Confirm that you are happy with the fee, which can vary significantly.
Bitcoin miner fee
- Confirm the address by comparing the starting and ending characters of the address you are sending to. When you are ready, click Send. You will then get one more opportunity to check the details. If you are happy, click Send. The bitcoin is on its way to your Muun wallet.
Congratulations! Your Bitcoin will appear in your Muun wallet somewhere between instantaneously and a few minutes. However, as with when we purchased bitcoin for our Exodus wallet, it will likely be up to ten minutes before the bitcoin is spendable. The next chapter, How Bitcoin Works, will cover precisely why this is so.
In the following image, you can see that the bitcoin has arrived in my Muun wallet.
Muun wallet received bitcoin from Exodus.
Note that the exact Bitcoin and fiat equivalent values vary because of the time lag between writing and taking screenshots at the different stages. Also, the Internet price feeds used by the various software applications differ.
If you click on the tiny upside-down V-shaped icon at the bottom of the Muun UI, you can see the transaction as shown next.
Muun show transaction
If you click on the transaction, you can see more details next.
Muun transaction details
If you click on one of the Bitcoin addresses, you can see a whole raft of information in your web browser, including that the transaction is unconfirmed. We will understand more about this in the next chapter. This screen is shown in the following image.
Hopefully, you got a sense of satisfaction from that last step. It is liberating if you think about it.
Congratulations, you have purchased, sent, and received your first bitcoin. Next, we had better find out how it worked. Then, we will soon understand how this apparent magic is happening behind the scenes. Hopefully, understanding how the Bitcoin network works is even more fascinating than using it.
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