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Sending and Receiving Bitcoin for Beginners

Introduction#

You've set up your COLDCARD™ and you're ready to try it out. What's next?

Let's get you started with some easy transactions using your COLDCARD and Sparrow Wallet.

What You'll Need#

What You'll Do#

If you've never installed GPG software or a desktop wallet before, don't be intimidated. Each of the apps listed are easy to install and have good documentation to step you through the process if you get stuck. Take your time and you'll learn faster than you might expect.

Export a JSON File From Your COLDCARD#

Video: COLDCARD Mk4 Export Wallet

NOTE: If you're going to use a wallet that has a passphrase, make sure to apply the passphrase immediately after entering your PIN. If you don't apply your passphrase, you'll export the values for your default wallet and won't be using your intended wallet.

The JSON file you'll save contains XPUB information Sparrow Wallet needs to process your transactions.

  1. Connect your COLDCARD to power and enter your PIN.
  2. Insert the MicroSD card in the slot on the COLDCARD.
  3. Navigate to Advanced > File Management > Export Wallet > Generic JSON. Read the message shown and press ✔ (✔) to continue.
  4. Enter 0 when prompted for an account number.
  5. Your COLDCARD will generate the JSON file and save it to the MicroSD card as coldcard-export.json. Press ✔ (✔) when it is finished.
  6. Remove the MicroSD card from your COLDCARD and insert it in the card reader for your computer.

Install Software and Import Your JSON File#

  1. Download and install the GPG software for your operating system if it is not already installed.
  2. Go to https://sparrowwallet.com/download/ and save these three files in the same folder/directory on your computer:
    • The latest release for your operating system
    • The Manifest .txt file
    • The Manifest Signature .asc file
  3. Follow their instructions under Verifying the Release on the Download page.
  4. Install and open Sparrow Wallet.
  5. Read and follow the instructions given during installation. Pay special attention to the information about using public servers and their connection indicators.
  6. When the Connecting to a Private Electrum Server screen appears, select Later or Offline Mode.
  7. A window that appears to be nearly blank will open, prompting you create or import a wallet.
  8. Open your file browser and drag coldcard-export.json to the Sparrow window.
  9. Enter a name for your exported wallet and set a password when prompted.
  10. Flip the toggle in the lower right corner of the Sparrow window to connect to a public server.

Sparrow Wallet will search for transactions associated with your wallet (displayed at the bottom of the window) as soon as it connects to a server. It's ready to use!

You'll notice Sparrow Wallet displays a lot of information. It's okay if you don't understand everything yet, there's a lot to learn.

Receiving Bitcoin#

To receive Bitcoin, you need give the sender a valid receive address generated by your wallet.

Software wallets, like Sparrow, automatically select the first unused receive address when you need to receive Bitcoin. Since it is tracking your wallet transactions, it knows which addresses have already been used. Reusing addresses is possible, but strongly discouraged for security reasons.

When you're ready to receive Bitcoin (who isn't?) log in to Sparrow Wallet and click the Receive button on the left side of the window. A receive address will be shown along with a QR code. Enter a Label for the transaction if you want, but it is not required. Give the sender the string of text in the Address field or give them QR code and they can send you Bitcoin. Easy.

Sending Bitcoin: Airgapped#

Sending is a little more complicated than receiving, but still very straightforward so long as you're careful. These instructions take you through signing a transaction without connecting your COLDCARD to your computer (airgapped) which minimizes risk.

For more detailed instructions on sending Bitcoin, go to: Ready To Sign?.

  1. Log in to Sparrow Wallet and click the Send button on the left side of the window.
  2. Enter the receive address you were given in the Pay to: field. You can paste the text string or take a picture of the QR code with your webcam.
  3. The Label field must not be empty, so enter whatever information is appropriate for the transaction, even if it is only one character.
  4. Enter the amount of Bitcoin (or sats) you need to send.
  5. Decide on a fee that is acceptable. In general, the higher the fee, the faster the transaction will be confirmed. You can enter an amount or use the slider to set the fee amount.
  6. When you are satisfied with your transaction settings, click Create Transaction.
  7. Carefully review the transaction overview. If everything looks good, click Finalize Transaction for Signing.
  8. Make sure you have a MicroSD card in your computer's card reader.
  9. Click Save Transaction and navigate to your MicroSD card to save the Partially Signed Bitcoin Transaction (PSBT).
  10. Move the MicroSD card to your COLDCARD.
  11. Connect your COLDCARD to power and enter your PIN if you haven't already done so.
  12. Select Ready to Sign from the main menu.
  13. The COLDCARD briefly shows Reading . . . and Validating . . . before displaying transaction details. Take every opportunity to check and double check transaction information. Make sure the address you are sending funds to is absolutely correct.
  14. If the transaction information is correct and the fee acceptable, press ✔ (✔). Otherwise, you can abort the transaction by pressing X.
  15. Your COLDCARD signs the transaction and saves two files to the MicroSD card, one ending in -signed.psbt, the other -final.txn.
  16. Press ✔ (✔) to return to the Main Menu.
  17. Transfer the MicroSD card back to the computer's card reader and select Load Transaction.
  18. Select the signed PSBT file and click Open.
  19. The Signatures bar turns blue, confirming the transaction is signed. Click the Broadcast Transaction button to finalize the transaction by broadcasting it to the Bitcoin network.

The Blockchain Status will remain Unconfirmed until Bitcoin miners verify the transaction.

Sending Bitcoin: Connected#

You can connect your COLDCARD to your computer and sign transactions directly, but it is not recommended for high-value wallet balances or large transactions.

Best practice is to keep larger balances assigned to a COLDCARD that is completely offline and have a separate wallet for smaller amounts available for spending.

For comprehensive guidance on sending Bitcoin, see: Ready To Sign?.

  1. Log in to Sparrow Wallet and click the Send button on the left side of the window.
  2. Enter the receive address you were given in the Pay to: field. You can paste the text string or take a picture of the QR code with your webcam.
  3. The Label field must not be empty, so enter whatever information is appropriate for the transaction, even if it is only one character.
  4. Enter the amount of Bitcoin (or sats) you need to send.
  5. Decide on a fee that is acceptable. In general, the higher the fee, the faster the transaction will be confirmed. You can enter an amount or use the slider to set the fee amount.
  6. When you are satisfied with your transaction settings, click Create Transaction.
  7. Connect your COLDCARD to the computer via USB cable and enter your PIN. A small button with the USB logo will appear in the lower right corner, next to the server connection toggle.
  8. Carefully review the transaction overview in Sparrow Wallet. If everything looks good, click Finalize Transaction for Signing.
  9. Click the large blue Sign button with the USB symbol in the lower-right corner.
  10. A pop-up window will appear showing the COLDCARD is connected to Sparrow Wallet. Click Sign.
  11. Your COLDCARD will show the transaction details for your review. Take every opportunity to check and double check transaction information. Make sure the address you are sending funds to is absolutely correct.
  12. If the transaction information is correct and the fee acceptable, press ✔ (✔). Otherwise, you can abort the transaction by pressing X and no funds will be transferred.
  13. After you press ✔ (✔), your COLDCARD signs the transaction and returns to the Main Menu. The Signatures bar turns blue, confirming the transaction is signed. Click the Broadcast Transaction button to finalize the transaction by broadcasting it to the Bitcoin network.

The Blockchain Status will remain Unconfirmed until Bitcoin miners verify the transaction.

Congrats! Go stack some sats!