In this quick tutorial I show you how you can move your Bitcoin from Coinbase to a software wallet called Electrum
If you keep your Bitcoin on an exchange you don’t actually have possession of the private key so you don’t own it. If the exchange gets hacked you could lose it, If the exchange is subject to a DDoS attack and goes down you cannot access it. It’s far better having it in a wallet where you actually own the private key for your Bitcoin. As long as you have the private key you can access it anywhere. That being said, depending on current transaction fees it may not be worth moving it from the exchange. If you only have $10 of Bitcoin and the transaction cost is $10 I wouldn’t bother moving it.
Moving Bitcoin from Coinbase to your Electrum wallet
You first need some Bitcoin which you can buy from Coinbase watch/read my “how to buy Bitcoin tutorial” Once you have enough Bitcoin in Coinbase that you want to move into a wallet where you have the private keys you have a few choices. Hardware, Software or Paper wallets. I don’t talk about the differences in the video but a software wallet is one on your computer, a paper wallet is your private and public keys printed on a piece of paper and a Hardware wallet is a USB attachable device which you can move your Bitcoin to. All have their Strengths and weaknesses but the easiest to move to for a Beginner is probably a software wallet.
An issue with software wallets though that does cause some concern is if your computer is infected with any Malware that is waiting to capture passwords and seed keys so make sure you computer is pretty secure. I use a spare computer with Linux installed to do this but windows is more popular just make sure its not infected.
Setting up Electrum
The first thing you will need to do is download and install electrum The process is pretty simple, download the one for your operating system and run the .exe file. If this is your first time running the wallet then create a new wallet and give it any name you like. Then create a new seed. Make sure you keep this seed safe, you will use your seed phrase to rebuild your wallet if you ever need to. Electrum recommend writing it down on a piece of paper and keeping it somewhere that’s secure. For me I think there is less risk of losing it if I encrypt it and save it on a few devices and even some cloud storage. Do what ever is good for you. Which ever solution you choose make sure it will still be there years later.
After saving your seed retype it in, you can’t copy/paste here. Then pick a password for your wallet. Your wallet file will now be created.
Send your Bitcoin
Open up Coinbase and go to your Bitcoin account. It’s pretty straight forward from here. Put in the address you want to send it to, copy the address from your electrum wallet by clicking the little blue copy button.
Then paste it into the address, make sure it actually matches the one you copied. I just check the start and the end. There is a Trojan virus that substitutes a different address into your clipboard if it notices a string of characters that look like a Btc address, so always check first, I mention it in my Bitcoin Phising Scam video.
Once you put in the address add the amount you want to send, take note of the transaction fee. If everything looks good then click send. You can send a small amount first just to check but that does mean paying twice on transaction fees.
You should see an unconfirmed balance on your wallet. After some time it will be confirmed and you will now have Bitcoin off the exchange and in your own wallet.
There are a few software wallets available Exodus and Electrum seem to be the most popular. Exodus definately looks better, it has a much better UI but is closed source. Electrum is open source and that is more important to me than the way it looks.