Those who have been into cryptocurrencies for a while now are probably laughing at me. My dumb self thought I could just give bitcoin “gift certificates” (yes yes, I know they’re actually called “paper wallets”) to friends for Christmas and be the coolest cat that 2017 has ever known.
It felt pretty cool handing out paper wallets instead of ampao or fruit cake. And my friends and fam — bless their hearts… were pretty supportive of what I thought was a brilliant idea.
Look at me spreading bitcoin love! Showing my friends the beautiful cryptocurrency world. Teaching them technology!
It was a rookie mistake.
To my friends and family who received bitcoin from me… I am sorry. Now you shall be forced to #HODL. Or wait until bitcoin gets better.
Why giving bitcoin sucks
Contrary to what my mom thinks, I am faaar from rolling in bitcoin riches. This means the bitcoin “GCs” I was giving away as presents were in the ₱500 – ₱1,000 range. *cue laugh track*
If you’re new to bitcoin, here’s the reason why it sucks:
Should you wish to take your bitcoin out of the paper wallet to either spend or just withdraw it, you’ll find that the transaction fees are INSANE.
For instance, transferring ₱500 from a paper wallet to another wallet will cost you ₱400. LOLWTF. This means your ₱500 will now be down to a whopping ₱100. Who’s the cool gift giver now?!?
The transaction fees change depending on how many bitcoin transactions are being processed. The more transactions there are to process, the more people are willing to pay miners higher fees to prioritize their transactions. I checked again just now and the transaction fee is down to ₱250. So… yay?
[You can actually set your own fees and check current sat/b rates but even at 200 sat/b, the amount I’m transferring won’t even be enough to cover the transaction fee. It’s crazy.]
The only time it will be worth paying the transaction fee is if you’re moving a decent amount of money from one wallet to another. Not for some “cool” gift.
Buuut… it’s the thought that counts. Right?
As I’ve told my friends, at least they can say someone gave them bitcoin for Christmas. And if that thing does go up to $1M by the end of 2020 as John McAfee predicts, then they will own ~$1,000, if it goes to sh**, then they will have… remnants of a coin that once was. A piece of history! A laminated historical artifact! (Yes, I laminated the paper wallets I gave them.)
Were you also given a bitcoin paper wallet?
I know my friends are reading this because I told them to lol. A girl needs readers. But if you’re also lucky enough to have a “creative” (and naive) friend like me, here’s what you can do with your digital ampao:
1. Check your balance online
You can check your wallet’s balance on blockchain.info. In the search bar, you can type your public address (it’s the one that says Load and Verify).
Public Address vs. Private Key
Your public address (load and verify) is basically your “bank account number” which means anyone can deposit money into it. You can give it to someone so they can send you money but this means that someone can also check the transactions within that address.
Your private key (spend) is what you need to withdraw your bitcoin or spend it. Only you should have access to it. Think of your private key as the password or PIN to your bank account.
2. Check your balance via the Blockchain app
You can also download the Blockchain app and add your public address as a “watch-only” address so that the BTC remains in your paper wallet but also allows you to track the value of your BTC. This is the safest route so that your private key remains in your paper wallet. (Or also with your gift giver, if she/he has a copy of it)
Remember, you will only scan the Load and Verify QR code for this one – NOT the “Spend” QR code or your private keys.
- Download the Blockchain app and create an account.
- Go to Bitcoin Addresses.
- Under Imported Addresses, tap on the + sign to add a new address.
- Scan the “Load and Verify” QR code from your paper wallet.
- Tap Continue.
- Voila. Now you have a watch-only address on your Blockchain app!
3. Import your bitcoin
If you only import funds from this wallet to your Blockchain app, your bitcoins will be available in both wallets – the paper wallet AND your Blockchain wallet. This means that if someone gave you the paper wallet, they may also have access to your private keys and could potentially also spend/withdraw your bitcoin.
- From the paper wallet address that’s now in your Blockchain app, tap “Scan Private Key.”
- Scan the “Spend” QR code on your paper wallet.
- If there’s a BIP38 encryption, type in the passphrase that was given to you. This passphrase keeps your paper wallet more secure because if a thief steals your paper wallet, they won’t be able to “redeem” it even if they have access to your private keys because they won’t know what the passphrase is. Hopefully your gifter gave you this.
- You’re done!
- Not really.
4. Transfer your bitcoin
Transferring (or “sweeping”) your bitcoin to another wallet is recommended for security purposes. Even if you trust the person that gave you the paper wallet, what if they made the mistake of printing 10 copies of your paper wallet and a thief gets a hold of them?
BUT, as I’ve explained above, this requires creating a new transaction. Which means transaction fees. Which means you’ll have less money.
If you transfer your bitcoin to your own wallet (mobile, web, or desktop), the paper wallet that was given to you can still be used. It’s just empty for now. (Kind of like my real-world wallet.)
People can still send you bitcoins but now the bitcoin that was initially in the paper wallet will be completely withdrawn and will now be in your wallet that no one else has access to.
- Tap on “Transfer Funds” from the pop up screen.
- Add the address you want it transferred to. You can manually type it in or use a QR code.
- Pay the crazy transaction fee.
- Be left with an even tinier amount of BTC if you were also given a tiny amount.
Aside from being able to transfer your paper wallet bitcoins to a different wallet other than Blockchain, you can also transfer it to an exchange and sell them for a different coin like ether, litecoin, or ripple. That is of course, if you’re willing to pay them crazydiculous transaction fees.
Hope you guys learned a lesson or two from my Christmas cryptocurrency experience! Happy holidays! 🎄🎇
I haven’t encountered that yet. I agree that it is not ideal to give BTC as a Christmas gift due to the high transaction fees. 🙁
However, I think giving bitcoin mining contracts will be cool or transmitting peso via coins.ph and let them convert to BTC directly.. 🙂
The coins.ph one might work but I wanted to give something they can open haha.
Nice to see you (online) again, Janette!!! 🙂 It’s been forever!