Wallet Management
Create Wallet & Restore Wallet
Help
Here you can complete two tasks:
(1) Create a new wallet: Enter a password
and click the "Create Wallet" button. You can also choose not to enter a
password, but it is recommended to protect the mnemonic with a password.
(2) Restore a wallet from a mnemonic: Enter your previous mnemonic and password
(if any), then click the "Create Wallet" button.
The entire HD wallet can be restored from the mnemonic, seed, or root extended private key. The account extended private key can restore all ordinary wallets within an account, and a single private key can restore one ordinary wallet. Therefore, an HD wallet is equivalent to a mnemonic, a seed, or a root extended private key, while an ordinary wallet is equivalent to a single private key. Root extended private keys and account extended private keys start with "zprv" and are 111 characters long, whereas ordinary private keys are about 50 characters long. Thus, an HD wallet contains many ordinary wallets.
You can input content in the password field and the red text areas below.
m/84'/0'/
Be sure to remember the mnemonic, password (if any), and path. Do not store the password with the mnemonic!
Derive Public Key and Wallet Address from Private Key
Help
Enter a private key to derive the public key and various types of Bitcoin addresses.
| 1. Various Address Types: | |
| 2. Various Encoded Private Keys: | |
| 3. Various Public Key Formats: | |
Generate Multi-Signature Address
Help
Here you can generate P2SH or P2WSH multi-signature addresses, or generate P2TR script path addresses. The P2TR key path address is generated in the "Create Wallet & Restore Wallet" section.
Wallet Balance, UTXOs, and Transaction Details
Help
Here you can query all UTXOs and the total balance of a wallet address, or enter a transaction ID to query a specific transaction.
Send Coin Transaction
1. Create
Help
You can initiate a transfer transaction here. The version, marker, lock time, and flag in the transaction body generally do not need to be modified unless you understand their exact purpose and truly need to change them. The main task in creating a transaction is to add inputs and outputs. Inputs are the senders, and outputs are the recipients. The Bitcoin-to-USD exchange rate is used to calculate the transaction fee. For example, if you are willing to pay a $2 fee, it will be automatically converted to "satoshis" based on the exchange rate. All amounts in the transaction are in satoshis, where 1 Bitcoin equals 100 million satoshis.
A rough estimate of the transaction fee (in USD): 1 + (number of inputs * 0.8) + (number of outputs * 0.5). For example, if your transaction has three inputs and two outputs, the fee would be 1 + 3*0.8 + 2*0.5 = 4.4 USD. Higher fees result in faster transaction processing, while lower fees may take longer, typically within a few hours.
Steps: (1) First, set the fee (can be modified). (2) Do not modify the version, marker, lock time, or flag unless you understand their exact meaning and truly need to change them. (3) When adding inputs, query the available UTXOs for the wallet address. Do not modify the sequence number or address type unless necessary.
It is recommended to use the Firefox browser and open this page in the browser's private window.
I am willing to pay USD as the transaction fee ( 0 satoshis). Note: The sum of all input amounts equals the sum of all output amounts plus the fee.
|
Add Input My Wallet Address: Sequence Number: |
Add Output Recipient's Wallet Address Amount: satoshis |
||||
2. Sign
Help
Since signing requires the private key, it is recommended to disconnect from the internet to ensure absolute security. When copying the private key, use segmented copying.
Instructions: (1) Click the "Import Inputs" button to import the inputs added in the previous step. (2) Check the inputs that need to be signed. (3) Enter the private key. Note: One private key can sign multiple inputs at once, and one input can be signed multiple times by different private keys. All inputs must be signed.
Since signing requires the private key, it is strongly recommended to: Use the Firefox browser, open this page in the browser's private window, and ensure the browser is in offline mode before signing. If you are unsure how to do this, refer to the "Help" section below.
| Input | Signing Status | Select | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||
Enter Private Key (WIF format or password-protected private key):
If the private key is password-protected, enter the password:
Decrypt Paras：
N= r= p=
3. Encode
Help
Convert the transaction body into Hex format for subsequent transaction broadcasting!
Instructions: Simply click the "Output Hex Format" button.
4. Verify
Help
Here you can deconstruct the Hex-encoded raw representation of transaction into its components and verify each field. Pay special attention to the recipient address, amount, output script, and transaction fee.
Instructions: By default, the Hex-encoded raw representation of transaction generated in step 3 is imported. You can also enter it separately.
Hex-encoded raw representation of transaction:
Or directly visit these websites to deconstruct Hex-encoded raw transactions:
Bitcoin Mainnet: https://live.blockcypher.com/btc/decodetx/Bitcoin Testnet: https://live.blockcypher.com/btc-testnet/decodetx/
5. Broadcast
Help
Here you can broadcast the Hex-encoded raw representation of transaction to the network. Miners will accept and include it in a block. The transaction typically completes within minutes or hours, but may fail depending on the fee you set. Higher fees result in faster processing. Even after inclusion in a block, the transaction is not 100% confirmed until about 5-6 more blocks are added, which may take about two hours.
There are two ways to broadcast a transaction: (1) Click the "Broadcast" button directly, or (2) Broadcast it on the websites listed below.
Or directly visit these websites to broadcast transactions:
Wallet Management
Create Wallet & Restore Wallet
Help
Here you can manage Ethereum wallets. The same mnemonic with different passwords
will generate different Ethereum wallets. You can restore an HD wallet from a
mnemonic or derive public keys and addresses from an existing private key
(whether password-protected or not).
1. To create a new wallet, first determine the number of mnemonic words (minimum
12, maximum 24; more words make it harder to guess) and the language of the
mnemonic (e.g., English, Simplified Chinese, etc.). The "mnemonic" + "mnemonic
password" can derive numerous private keys (one private key corresponds to one
wallet). Different passwords will derive different private keys even with the
same mnemonic, so it is recommended to protect the mnemonic with a password. The
"wallet path" is a string like "m/44'/60'/i'/0/j...", representing the
j+1th
wallet in the i+1th account, where i and j are integers
greater than or equal to
0. You can only change i and j or extend the path. For example, the default path
"m/44'/60'/0'/0/0" represents the 1st wallet in the 1st account,
"m/44'/60'/0'/0/5" represents the 6th wallet in the 1st account,
"m/44'/60'/3'/0/2" represents the 3rd wallet in the 4th account, and
"m/44'/60'/2'/0/1/3" represents the 4th sub-wallet under the 2nd node in the 3rd
account. However, it is recommended not to make the wallet path too long or
complex to avoid confusion or forgetting.
If you input the Private Key Password, then the private key will be encrypted
using this password.
2. To restore a wallet, there are two methods: (1) Restore from the "mnemonic
language," "mnemonic," "mnemonic password," and "wallet path" by entering the
language, mnemonic, password, and path used when creating the wallet. (2)
Restore the wallet address from a private key by entering the private key. If
the private key is encrypted, you also need to enter the "Private Key Password".
If you plan to use the created wallet formally, be sure to remember the mnemonic, mnemonic password (if any), wallet path, private key, Private Key Password(if any), and address. It is recommended to encrypt the private key. The address can be shared with others for receiving coins, but all other information must never be disclosed.
Number of Mnemonic Words:
Mnemonic Language:
Mnemonic:
Mnemonic
Password:
Wallet Path: (Note: Path m/44'/60'/i'/0/j represents the jth wallet in the ith account, where i,j=0,1,2,…)
Private
Key:
Private Key Password:
Ethereum Wallet:
Wallet Balance & Transaction Details
Help
Here you can query the balance of an Ethereum wallet or enter a transaction ID to query a specific transaction.
Send Coin Transaction
1. Create
Help
"Recipient Wallet Address" is the Ethereum address to which coins will be
transferred, such as "0xB8309ea73A7C61599bF33C73085D24511E042b06".
"Transfer
Amount" is the number of Ether to transfer, such as 0.005 Ether, or 0 Ether (if
you only want to store information in the remarks).
"Transaction Fee" is the
amount in USD you are willing to pay for this transfer, which will be deducted
from the sender's wallet in equivalent Ether. The fee is unrelated to the
transfer amount but may be related to the "remarks." If there are no remarks, a
transaction fee is typically around $5. Higher fees result in faster processing,
while fees below $1 may take longer or fail.
"Wallet Private Key" is the private key of the sender's wallet, used for
signing. An unencrypted private key looks like
0x6b714fb46b3558192193712dd9dacabd0e29f75b02c81e21d4fc675f9d50719a, while an
encrypted private key looks like
6PYK8XSffZBgqqCMX2METG2VXUdAX5EfMDnCAV6D66B2dWQzdF4Za9Yspr.
"Private Key Password" is used to decrypt the private key. If your private key
is encrypted, you must enter the password to decrypt it; otherwise, leave it
blank.
"Nonce" is the sequence number of the sender's wallet for outgoing
transactions. For a new wallet, the first outgoing transaction has a nonce of 0,
the second is 1, and so on. If the network is accessible, the nonce will be
obtained automatically; otherwise, it must be entered manually and cannot be
incorrect. You can query the nonce on third-party websites.
"Transaction Type" defaults to 2 (EIP-1559), which is currently the most widely
used, with low fees. Do not modify this unless you fully understand the
implications.
"Gas Limit" defaults to 21000. If you add remarks, you must
increase the gas limit; otherwise, miners will ignore the transaction.
"Tip
to Miner" is specific to type 2 transactions. The tip is part of the
"Transaction Fee"—the amount you are willing to allocate to miners. The
difference between the transaction fee and the tip is transferred to the
0x0000000000000000000000000000000000000000 address, where the Ether is
permanently locked, effectively reducing circulation. Typically, the tip
accounts for over 90% of the transaction fee. The tip incentivizes miners to
process your transaction faster.
"Remarks" can contain up to 7000 Chinese
characters. If you want to permanently store information on the blockchain,
enter it here. More text increases the transaction fee, potentially costing tens
or hundreds of dollars.
Wallet Address:
Transfer Amount: Ether
Wallet Private Key: Private Key Password:
Nonce:
Transaction Type: (Do not modify unless necessary)
Gas Limit:
Transaction Fee: USD
Tip to Miner: USD (Tip is included in the transaction fee)
Remarks:
Transfer Result:
2. Broadcast
Help
Here you can broadcast the Hex-encoded transaction to the network. Miners will
accept and include it in a block. The transaction typically completes within
minutes but may fail depending on the fee. Higher fees result in faster
processing. Even after inclusion in a block, the transaction is not 100%
confirmed until about 5-6 more blocks are added, which may take several minutes.
There are two ways to broadcast a transaction: (1) Paste the Hex-encoded
transaction code into the input box and click the "Broadcast" button, or (2)
Broadcast it on the third-party websites listed below.
Before broadcasting, it is recommended to click the "Decode" button to verify
all fields, especially the recipient address, transfer amount, and fee.
Or directly visit these websites to broadcast transactions:
Ethereum Name Service ( ENS )
Help
ENS domains can be explained as Ethereum addresses, and vice versa.
ENS: ：
Address:
Private Key Protection
Help
Here you can encrypt a plaintext private key into a ciphertext private key or decrypt a ciphertext private key back to plaintext. Since private keys are extremely important, it is recommended to encrypt them for secure storage. As long as the password is not leaked, even if others obtain the ciphertext private key, they cannot sign transactions to steal your cryptocurrency. Before each signing, you must first decrypt the private key, so never forget the password! When copying and pasting private keys, do it in segments—for example, copy the first half, then manually enter a few characters, and finally copy the remaining half. This prevents clipboard spyware from stealing the private key. Do not change "CPU/Memory Cost," "Block Size," or "Parallelization" unless you understand their exact meaning and truly need to modify them.
After encrypting the private key, always verify that it can be decrypted. The "Password," "CPU/Memory Cost," "Block Size," and "Parallelization" must be identical for encryption and decryption, and remember any modified values!
Select Coin Type:
Be sure to remember the ciphertext private key and password!!
Encrypt Paras： CPU/Memory Cost= Block Size= Parallelization=
Customize Mnemonic
Help
A valid mnemonic has the last word as a checksum of the other words, so you cannot
arbitrarily choose all words. The number of words is limited to 12, 15, 18, 21, or
24.
Here you can customize the mnemonic (e.g., choose familiar words for easier
memorization). Except for the last word, all other words can be specified. However, the
more words you specify, the weaker the security, as manually chosen words lack
randomness compared to system-generated mnemonics. Therefore, the principle is to
specify as few words as possible.
Steps: First, determine the number of words in the mnemonic (more words enhance
security). Next, select the mnemonic language (default is English). You can also choose
Simplified Chinese, Japanese, or other languages, but English has better universal
support. Then, specify certain words (except the last one). For example, specify the
first five words as "love you very much really" in English or the 1st, 3rd, 5th, and 7th
words as "中," "王," "大," "民" in Simplified Chinese. Finally, click the "Complete
Mnemonic" button to generate a valid mnemonic.
Note: Always verify the final mnemonic in Bitcoin or Ethereum wallet management to ensure it correctly generates a wallet!
Number of Mnemonic Words:
Mnemonic Language:
Generate QR Code
Help
Create a QR code with public key, address, ENS domain name and other information to save on your phone, making it easy to send to others or scan.
Note: You can turn your private key or mnemonic phrase into a QR code, but never store it on mobile devices (such as phones, tablets, etc.) or scan it, as mobile devices are the least secure!
Content saved on the QR Code:
QR Code Head: Tail:
Image Steganography
help
Hide some sensitive information in an image and then pass the image to others to achieve the purpose of exchanging sensitive information. Encryption is allowed before hiding; if others obtain the image but do not have the password, they still cannot access the information.
It is not recommended to transmit private keys in this manner; if it must be done this way, the private key should first be encrypted with a password.
Information hidden in the image:
Password:
Choose a Picture:
Signature and Verification
Help
Digital signatures are used to affirm the ownership of documents, similar to handwritten signatures in real life. A private key is used to sign, while a public key is used to verify the signature. The signed document cannot be changed; otherwise, the signature verification will fail. The other party must obtain the document, public key, and signature before being able to verify the signature. The private key must be a hex-encoded string, for example, c6f53ee725f194b9bc8d06b61b91fa1d2fb6884d2a36fe037579bbb950f67ee2. The public key is also a hex-encoded string and must have the 0x prefix removed, for instance, 02f7eb7c084a14c30a3a5e6e0dcc10a9881ebf90ba45039f366d1919559c92f3c4. Current popular signature algorithms include Schnorr, ECDSA, DSA, and RSA; Schnorr is more advanced, but currently, it is not as widely used as ECDSA.
Select the signed document:
Document summary:
Private Key:
Private key protection password:
Public Key:
Signature algorithm:
Signature result:
Encryption and Decryption
Help
Encrypt the file with the public key and decrypt the file with the private key.
Select the encrypted file:
Private Key:
Private key protection password:
Public Key:
Result:
Conversion between UTF8 and HEX
Help
Converting UTF-8 text (such as Simplified Chinese) to hex encoding and vice versa.
Warning:
(1). Use the Firefox browser, which can be
downloaded and installed here
. Firefox is open-source and less likely to have backdoors.
(2). Use Firefox's private window (press Ctrl+Shift+P after launching Firefox to open a private
window). Closing the private window destroys all browsing traces, ensuring your private keys remain
secure.
(3). When generating, restoring, or signing transactions, remember always disconnect the browser
from the internet
(press Alt, click "File" in the top-left corner, then select "Work Offline"). This prevents private
keys from being leaked over the network.
(4). When copying and pasting private keys, use the three-segment method: Copy and paste the first
segment, manually enter the next few characters, and then copy and paste the remaining characters.
This prevents clipboard spyware from stealing your private key. Refer to the image below:
1. Introduction to Transactions
Let's start with a story: John saved some money after years of hard work but found no good investment opportunities in China. "At the very least, I want to preserve the value of my savings," John thought. After careful consideration, he decided to invest in cryptocurrency, hearing that one Bitcoin could buy an apartment in a second-tier city in five years, so he chose Bitcoin. First, John needed a Bitcoin wallet. He registered an account on a cryptocurrency exchange, which automatically provided an online Bitcoin wallet (let's call it Wallet A), and then obtained an offline wallet (Wallet B). John bought Bitcoin through Wallet A and transferred it to Wallet B once the amount reached a certain threshold (e.g., equivalent to 100,000 dollars), as Wallet A was on a third-party platform and less secure, while Wallet B was known only to him. When selling Bitcoin, he transferred it from Wallet B to Wallet A first, then sold it on the platform. Besides online trading, there was also an offline channel. For example, John knew Alice, who had Bitcoin to sell. John contacted Alice to buy Bitcoin, transferred 100,000 RMB via WeChat, and Alice sent the Bitcoin directly to Wallet B.
Through this website, you can not only obtain Wallet B but also send coins offline, find where to get Wallet A, and locate offline sellers of cryptocurrency...
In China, investing in cryptocurrency is the best way for ordinary people to achieve financial success. As of the end of 2024, one Bitcoin is worth $100,000, enough to buy an apartment in a third-tier city. It is certain that in five years, one Bitcoin will buy an apartment in a second-tier city, and in ten years, it will buy one in a first-tier city! Exciting, right? If so, read on...
So how exactly do you buy and sell cryptocurrencies? Stay tuned for the next episode... haha.
First, you need at least a cryptocurrency wallet. The wallet contains an address. When you buy cryptocurrencies, you provide this address to the seller and say, "Hey, please send the coins to this address!" The seller might be cautious and reply, "Please double-check the address to ensure it's correct. Otherwise, if the coins are sent to the wrong address, it's entirely your responsibility!" So you carefully verify the wallet address again and reassure the seller, "The address is correct, don't worry!" After the seller completes the transfer, you can check whether the coins have been received by entering the address on a website like https://blockchair.com/.
As you continue to buy cryptocurrencies and watch the prices rise day by day, you estimate how much money you've earned. Your wealth grows gradually, and you slowly move up from being an ordinary person. One day, you finally make it big and can't help but shout, "Damn, I love this crazy world! Cheers to this inevitable life!"
How do you buy cryptocurrencies? Don’t rush; let me continue the story... On a dark and windy night, you arrive at the door of a small wooden cabin... haha!
The wallet also contains a private key. When selling coins, you need to initiate a transfer transaction, sign it with this private key, and then broadcast the signed transaction online. A miner will eventually include your transaction in a block. Wait a few minutes, and the transaction will usually be completed. The higher the transaction fee you offer, the higher the processing priority. The fee goes to the miner, but nowadays, miners care more about the Mining rewards than the negligible transaction fee. You set the fee yourself when initiating the transaction, and it typically costs less than ten dollars. The fee amount is unrelated to the transfer amount. I once paid a fee of just $0.4, and the transaction was completed quickly. The fee isn’t paid in dollars but in the equivalent cryptocurrency. One bitcoin equals 100 million satoshis—i.e., 100,000,000 satoshis. At the current exchange rate (1 bitcoin = $100,000), $1 is roughly 1,000 satoshis, so $0.4 equals 400 satoshis. For example, if I initiate a transaction to sell 0.3 bitcoin to Alice with a $1 fee, the main transaction data would be: Li Si’s wallet address: xxxxx, amount: 30,000,000 satoshis, fee: 1,000 satoshis. Alice can pay me $30,000 via bank transfer, WeChat, Alipay, or the equivalent in RMB (e.g., 210,000 RMB at an exchange rate of $1 = 7 RMB).
The address is derived from the private key, but the private key cannot be reverse-engineered from the address. The private key and address are a pair. Never share your private key with anyone—only the holder of the private key can sell the cryptocurrencies in the wallet!
How do you get a wallet? Operate in the "Wallet Management" on this website. How do you initiate a transaction? Click "Offline Signing" and "Publish Transaction" there.
2. Cryptocurrency Wallet
2.1 Private Key
A private key is a cryptocurrency wallet! A private key is a 256-bit binary random number! Suppose you assign the obverse of a coin to 1 and otherwise to 0. If you toss a coin 256 times and record the results, you’ll have a decent private key, like this:
I tested the coin-tossing method to generate a private key. The recorded binary number is: 1100111101001101000100000011000011111110110011100001000001110001101101110011001001000110011110010011110100000110110100111101000010001110101011010011100001010100100000011110111000101000110010111111011110110010001010000101100101110111001001111001100011010001. A 256-bit binary number is hard to remember, but converting it to hexadecimal makes it easier. For example, the hexadecimal equivalent of the above binary number is: cf4d1030fece1071b73246793d06d3d08ead385481ee28cbf7b22859772798d1. "Seriously? This is still hard to remember." "Well, why not just write it down?" Writing the private key on paper creates a paper wallet, memorizing it creates a brain wallet, and storing it digitally creates an electronic wallet. Both Bitcoin and Ethereum use 256-bit random binary numbers as private keys, so the same private key can initiate transactions for both. However, I advise against this because if you forget the private key, your cryptocurrencies are gone forever. Alternatively, if the private key is stolen, all your coins are at risk. Bitcoin experts recommend using a new private key for each transaction you receive! For example, use private key x to receive 3 bitcoins from John and private key y to receive 5 bitcoins from Alice. If Bob sends you coins, use another new private key. My suggestion is: follow the experts' advice for large transactions, but for small amounts, avoid using too many private keys to simplify management.
To make it easier to import private keys into wallet apps, Bitcoin converts hexadecimal private keys into Base58-encoded formats, known as WIF (Wallet Import Format). For example, the WIF format of the coin-tossing private key above is: L4AgDeoTPbdRd4S7X9UhXaNtyxZhDuj7EoUxPUndDYkvfmHjR8Cd. Binary, hexadecimal, and WIF-formatted private keys are interchangeable, so you only need to remember one. Note: hexadecimal letters are case-insensitive, but WIF private keys are strictly case-sensitive!
Never share your private key with anyone—keep it to yourself! However, in case of an emergency, you might want to share it with family to prevent your cryptocurrencies from being lost forever... just saying.
In practice, we don’t generate private keys by tossing coins but use computer programs instead. That’s all for private keys. If you want to learn more, check out my new book The Definitive Guide to Cryptocurrency Secure Trading in Practice available for download on my personal website.
2.2 Address
The wallet address is derived from the public key, which in turn is derived from the private key. However, the public key cannot be reverse-engineered from the address, nor can the private key be derived from the public key. You can share your address with others—when buying cryptocurrencies, sellers send coins to this address, similar to online shopping where the seller ships goods to your address. Different cryptocurrencies derive addresses from private keys in different ways, resulting in different addresses. For example, Bitcoin and Ethereum addresses derived from the same private key are different. A Bitcoin address cannot receive Ethereum, and vice versa. If you mix them up, the coins will be lost forever—remember this! Even for the same cryptocurrency, there may be multiple address types over time. For example, Bitcoin addresses include P2PK, P2PKH, P2SH, P2WPKH, and P2TR (introduced in 2021). P2WPKH is currently the most popular due to smaller transaction data and lower fees. P2SH and P2TR support multi-signature transactions, ideal for organizations requiring multiple approvals (e.g., a company needing signatures from the CEO, CFO, and finance manager for transactions). The same private key can derive all address types. For example, I can derive all Bitcoin address types from one private key. When sending coins, I provide the recipient with the latest address type their wallet supports (e.g., P2WPKH for John’s wallet and P2PKH for Li Si’s older wallet).
For example, the following Bitcoin addresses are derived from the coin-tossing private key above
(L4AgDeoTPbdRd4S7X9UhXaNtyxZhDuj7EoUxPUndDYkvfmHjR8Cd) using https://secretscan.org/:
P2PKH
address: 1QKaUAoU2h9HUFyBpxFwrSZ4X4n4X2Xukp
P2SH address:
35SbZDs5biwdSFFUTR5GTQSH2fkDX2GqQ8
P2WPKH address:
bc1qll89rqfmzllnyd9cnzy8vex9jueqv86y6587wg
P2WSH address:
bc1q0lsk5wd7kqr053lyzxmcdy2a07a7ntju4rjjwftutqsahg6u2gfqu6tp6v
P2TR address:
bc1pgp2szey33f8eaqxd5hlulhmhd6dh8fz90zdgftr0var5jcs4vypsx5u8f6
I didn’t generate a P2PK address because it’s outdated and rarely used. P2PKH and P2SH addresses use Base58 encoding and are case-sensitive, while the latter three use Bech32 encoding and are lowercase-only.
2.3 Wallet Balance
Ethereum has a balance concept, but Bitcoin does not. The balance shown in Bitcoin wallet apps is calculated temporarily—it’s the sum of all unspent transaction outputs (UTXOs). When you spend coins, you consume previously received UTXOs. Here’s an example:
Suppose your address received two transfers: 1 bitcoin from John and 0.5 bitcoin from Alice. Your wallet balance is now 1.5 bitcoin. Latter, you want to send 0.7 bitcoin to Jack. This requires spending the 1 bitcoin from John. The transaction data would look like this: Spend the 100,000,000 satoshis (1 bitcoin) from John, send 70,000,000 satoshis (0.7 bitcoin) to Jack, pay a 1,000 satoshi fee, and return the remaining 29,999,000 satoshis to your address. After signing and publishing the transaction, John’s transfer is spent and excluded from future balance calculations. However, you now have a new UTXO of 0.29999 bitcoin, so your balance becomes 0.79999 bitcoin.
In the above example, could I spend Li Si’s 0.5 bitcoin transfer instead? No, because it’s insufficient. But I could spend both John’s and Li Si’s transfers (totaling 1.5 bitcoin) and return the difference (0.79999 bitcoin) to my wallet (usually a different address to consolidate funds).
In summary, a Bitcoin wallet balance is the sum of all unspent transaction outputs (UTXOs).
3. Offline Signing
A transfer transaction must be signed before publication. The private key is used to sign the transaction. Miners verify the signature before including the transaction in a block; otherwise, it’s discarded. To initiate a transfer, you must specify: (1) Which UTXOs to spend? (2) Which addresses to send coins to and how much? (3) Which address to return the remaining coins after deducting the fee?
The spent UTXOs are called inputs, and the recipients are called outputs. Thus, the equation is: Total inputs = Total outputs + Transaction fee. A transaction includes inputs, outputs, and input signatures. The fee is calculated by miners as the difference between input and output amounts.4. Private Key Management
Private keys are crucial, so managing them is a top priority. Forgetting a private key means losing your cryptocurrencies forever, and a stolen private key means your coins are at risk.
4.1 Encrypting Private Keys
To prevent the private key from being stolen, it is highly recommended that you encrypt the private key. Even if someone obtains the encrypted key, they can’t use it without the decryption password. Miners reject unsigned transactions! The password should be strong (like a bank or email password), ideally 9+ characters with numbers, letters, and symbols. Store the encrypted key on paper, a computer, USB drive, cloud, or email. Weak passwords (e.g., "123456") are risky, especially if the encrypted key is stored online. Use the "Private Key Protection" in the Tools Menu on the left side of the weibsite.
4.2 HD Wallets
HD (Hierarchical Deterministic) wallets generate many private keys for easier management. Following the "best practice" of using a new private key for each transaction, HD wallets are ideal as transactions increase. The core idea is deriving multiple accounts and private keys from a set of words (the mnemonic phrase), typically 12, 15, 18, 21, or 24 words. More words mean greater security. For example: "asset curve boss naive trade never sister evoke what lunch glory update course acquire first mistake solve bullet pipe practice husband round glow wing" is a 24-word mnemonic. The last word includes a checksum, so don’t create your own phrase. You can add a password during account derivation for extra security. For example, two years ago, I used the mnemonic "poem crater dove table knock moment raccoon scrub color raccoon figure stumble" with password "A1b2C3&" to derive wallet #2 in account #5, where John sent 3 bitcoin. I noted: "poem crater dove table knock moment raccoon scrub color raccoon figure stumble/Account 5/Wallet 2" on paper, while memorizing the password. To spend the coins, I retrieve the private key by entering the mnemonic, password, account, and wallet number in "Wallet Management."
5. Best Practices
Our recommendations:
(1) For casual traders (under 10 transactions/year) with assets under one hundred thousand dollars : Use one password-protected private key, derive Bitcoin P2WPKH/P2PKH and Ethereum addresses.
(2) For traders with $1M–$10M assets: Use one 18+ word mnemonic with a password, derive Bitcoin HD wallets (path: m/84'/0'/i'/0/j) and Ethereum HD wallets (path: m/44'/60'/i'/0/j). Limit to 1–2 accounts with 2–3 wallets each.
(3) For heavy investors ($10M+): Use separate mnemonics for each cryptocurrency (24 words) with 15+ character passwords (mixed case, numbers, symbols). Use 3–5 accounts with multiple wallets. For large transactions (>$10M), use dedicated wallets and encrypt private keys. Sign transactions with encrypted keys and temporary passwords.
Good luck! If in doubt, feel free to send us an email, our email address is admin@walletoffline.com
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