Getting Started, Part 2: Wallet Security

Introduction

Unfortunately, there are always people trying to steal your money. This is also the case in the cryptocurrency world. However, if you take certain precautions, you can greatly reduce the chance of a hacker stealing your hard-earned coins.

Step 1: Make Sure Your Computer Hasn’t Already Been Compromised

This is a very important step. There is no point in making sure your wallet is secure if there is already a virus/malware on your computer. Microsoft Security Essentials is generally good for Windows users. Mac users probably don’t have to worry as much, but I still recommend using a program like AVAST.

Step 2: Download the Liteaddress.org Wallet Generator

Download the offline liteaddress.org wallet generator here. This program allows you to generate wallets offline, securely. Note that this obviously only works for storing Litecoins. A bunch of other cryptocurrencies have a version of liteaddress such as bitaddress (BTC) and Unknownfeatheraddress (FTC). Regardless, the procedure is the same. If you can’t find one for your cryptocurrency, your options are to either convert your into a more popular currency, or find something equivalent via either forums or Google (make sure to verify the source’s reliability!).

A Note About Using an Offline Generator: Liteaddress.org and similar all of course function both online and offline (provided you download it), but I highly recommend using the offline version. As always, use at your own risk.

Step 3: Generate a New Wallet

Before you do anything, disconnect your computer from the internet completely. This means turning off the wi-fi and disconnecting any ethernet cables. DO NOT SKIP THIS STEP. Open the .html file included with the download. It should look identical to what the online sight looks like. Click “Generate New Address” and then print it (make multiple copies). Store the papers in a safe, secure place where you know you won’t lose it or where it could get stolen. DO NOT put it in a place like your (physical money) wallet. After this is done, clear your browser history (cache, etc).

Step 4: Transfer Funds to Your New Wallet

After taking your computer back online, fire up Litecoin-QT (or similar) and go to the “Send” tab. Transfer your funds to the public key of your freshly generated wallet. Your coins are now secure and you can breathe easily. Now, like a normal wallet, just give people the public key of your paper wallet and funds will be sent to it.

Step 5: Check Your Wallet Funds

Since there is no client on your computer to check the wallet balance, you may be wondering if you have to import the keys every time you want to check the balance. This is not the case. Since all of the transactions are on the publicly available blockchain, you can use a explorer like Abe. To check the transactions to/from that wallet (or any wallet). Simply enter the wallet public key and click “Search”. Wallets that currently have no funds on them probably won’t show up.

Step 6: Spending Coins

When you decide that you want to spend some/all of the funds on the secure wallet, open up Litecoin-QT, go to the help menu, and click “Debug window”. Then click on the “Console” tab. You should see something like this:

Screen Shot 2014-01-11 at 11.20.41 AM

In the box, type in “importprivkey privatekeygoeshere “yourdesiredlabel”” (No quotes around the entire thing, but quotes around the label).

Screen Shot 2014-01-11 at 11.24.35 AMAfter it is confirmed, the funds will have been added to your wallet, which you can now easily spend using the “Send” tab. Note that imported wallet is now useless security-wise and that you now have to go back to step 1 if you want to re-secure the funds.

Notes

  • Although following these steps greatly reduce the chance of your coins being stolen, nothing can prevent it completely. I do not take responsibility for any lost funds.
  • If you get an error when importing your wallet, it is most likely your -QT wallet is encrypted and you need to unlock it by typing “walletpassphrase “PassPhrase” 1000″ where 1000 is the amount in seconds that you want the wallet to be unlocked.

Conclusion

Your wallet is now secure! Next up in this guide is cashing out your coins.

 

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