How Do I Set Up a Bitcoin Wallet?

TL;DR: This guide covers two software wallets for storing and transacting Bitcoin on-chain. BlueWallet is the beginner-friendly option, available on iOS and Android. Electrum is the advanced option with a richer feature set, available on Windows, macOS, Linux, and Android. Both are non-custodial — you hold your own keys.

1. On-chain wallets vs. Lightning wallets: a quick note

Unlike Lightning wallets, which are designed for fast, low-cost everyday payments, on-chain wallets transact directly on the Bitcoin blockchain. This means:

• Transactions are slower (typically 10 minutes to an hour for confirmation, longer during congestion)

• Fees vary based on network demand and can be significant during busy periods

• On-chain is better suited for larger amounts, savings, and transactions where speed is not critical

On-chain and Lightning are complementary — many users keep both types of wallet for different purposes. 

2. Understanding self-custody

Both wallets covered in this guide are non-custodial: you hold your own private keys, and no third party can access, freeze, or recover your funds. This means your seed phrase (12 or 24 words generated when you create a wallet) is the only backup that exists.

⚠️ Critical: Write down your seed phrase on paper the moment it is shown to you. Never store it digitally. Never photograph it. Anyone with your seed phrase has full access to your funds.

3. BlueWallet

Type: Non-custodial · Developer: BlueWallet Services · Platforms: iOS (App Store) · Android (Google Play) · Open source: Yes

BlueWallet is widely regarded as the most approachable self-custodial Bitcoin wallet for mobile. It has a clean, intuitive interface, supports multiple wallets in parallel, and requires no technical knowledge to get started. It supports both on-chain Bitcoin and Lightning (via its built-in custodial Lightning wallet or connection to your own node).

3a. Download & install

1. Open the App Store (iOS) or Google Play Store (Android) on your device.

2. Search for BlueWallet — Bitcoin Wallet. Confirm the developer is BlueWallet Services S.R.L. before installing.

3. Tap Install and open the app once the download is complete.

Tip: BlueWallet is also available as a desktop app for macOS via the official website at bluewallet.io. The setup process is identical. 

3b. Creating your first wallet

1. On the home screen, tap Add a wallet.

2. Enter a name for your wallet (e.g. "My Bitcoin Wallet") and select Bitcoin as the type. Leave the default set to HD SegWit (P2SH-P2WPKH) unless you have a specific reason to choose otherwise — this format offers a good balance of compatibility and lower fees.

3. Tap Create.

4. BlueWallet will display your 12-word seed phrase. Write down every word in order, exactly as shown.

5. Tap OK, I wrote it down to confirm. You will not be shown this phrase again unless you go to wallet settings.

6. Your wallet is now created and ready to receive Bitcoin.

⚠️ Warning: BlueWallet does not ask you to verify your seed phrase during setup. This makes onboarding faster, but means you must be especially diligent about writing it down correctly before moving on.

3c. Receiving Bitcoin

1. On your wallet's main screen, tap Receive.

2. BlueWallet will display a QR code and your Bitcoin address. You can copy the address or share the QR code with the sender.

3. For privacy, BlueWallet automatically generates a new address for each transaction — this is normal behaviour for HD wallets. All addresses belong to your wallet and all funds sent to any of them are accessible with your seed phrase.

4. Once the sender broadcasts the transaction, it will appear in your transaction list as Unconfirmed. After one or more block confirmations, it will show as confirmed.

Tip: You can tap Share to send your receiving address via any app on your phone — useful when receiving from someone remotely.

3d. Sending Bitcoin

1. Tap Send on your wallet's main screen.

2. Enter or scan the recipient's Bitcoin address. You can also paste it from your clipboard.

3. Enter the amount in BTC or your local currency (toggle between the two by tapping the amount field).

4. Tap Next to see the fee options. BlueWallet offers three presets — Fast, Medium, and Slow — corresponding to different fee rates and estimated confirmation times. You can also enter a custom fee rate (in sat/vB) by tapping the fee row.

5. Review the total including fees and tap Send now to broadcast the transaction.

Tip: Check mempool.space before sending to understand current network congestion. If your transaction is not urgent, choosing Slow can save a significant amount in fees. 

3e. Backing up and restoring

Viewing your seed phrase after setup

1. Go to your wallet's main screen and tap the three-dot menu (top right).

2. Select Export / Backup.

3. Enter your device PIN or biometric authentication when prompted.

4. Your 12-word seed phrase will be displayed. Verify it matches what you originally wrote down.

Restoring your wallet on a new device

1. Install BlueWallet on your new device.

2. On the home screen, tap Add a wallet and then tap Import wallet (at the bottom).

3. Type or paste your 12-word seed phrase into the field, exactly as written (lowercase, one word per space).

4. Tap Import. BlueWallet will scan the blockchain for your transaction history and restore your balance automatically. This may take a minute or two.

3f. Tips & best practices for BlueWallet

• Use a new address for every transaction. BlueWallet generates these automatically — using fresh addresses each time improves your privacy on-chain.

• Set a PIN or biometric lock. Go to Settings → Security to require authentication every time the app opens.

• Enable watch-only wallets. BlueWallet supports watch-only wallets using your extended public key (xpub). This lets you monitor your balance on a separate device without exposing your private keys.

• Connect to your own node. For advanced privacy, go to Settings → Network → Electrum server and point BlueWallet to your own Bitcoin node or a trusted Electrum server. By default, BlueWallet connects to a third-party server, which means that server can see your transaction queries.

• Don't use the built-in Lightning wallet for large amounts. BlueWallet's Lightning feature is custodial by default (hosted by BlueWallet). Use it only for small spending amounts, or connect it to your own LND node.

• Verify the app after every update. BlueWallet is open source — you can verify builds at github.com/BlueWallet/BlueWallet.

⚠️ Warning: BlueWallet has historically been targeted by fake copycat apps in app stores. Always verify the developer name is exactly BlueWallet Services S.R.L. before installing or updating.

4. Electrum

Type: Non-custodial · Developer: Thomas Voegtlin / Electrum Technologies · Platforms: Windows · macOS · Linux · Android · Open source: Yes

Electrum is one of the oldest and most battle-tested Bitcoin wallets in existence, first released in 2011. It is desktop-first and packed with advanced features — including hardware wallet integration, multisig, coin control, Replace-By-Fee (RBF), and full custom fee management. It is not designed for casual users, but it is an excellent choice for anyone who wants deep control over their transactions. 

Note: Electrum is not available on iOS. Android users can install it from the official website at electrum.org — it is not published on Google Play.

4a. Download & install

⚠️ Important: Only ever download Electrum from electrum.org. There are numerous fake versions of Electrum distributed through search ads and third-party sites that steal funds. Do not search for it in an app store or click sponsored links.

On Windows or macOS:

1. Go to electrum.org and download the installer for your operating system.

2. Verify the download using the GPG signature provided on the website before running the installer. This confirms the file was not tampered with.

3. Run the installer and follow the on-screen prompts. On macOS, drag Electrum to your Applications folder.

4. Open Electrum. The setup wizard will launch automatically on first run.

On Linux:

1. Go to electrum.org and download the AppImage or source package.

2. Verify the GPG signature, then make the AppImage executable: chmod +x electrum-*.AppImage

3. Run it directly: ./electrum-*.AppImage

On Android:

1. Go to electrum.org on your Android device and download the APK directly. Do not install from Google Play — Electrum is not officially published there.

2. Enable installation from unknown sources in your device settings if prompted.

3. Install and open the app.

4b. Creating a new wallet

1. On the Install Wizard, select Create a new wallet and click Next.

2. Choose a file name for your wallet (the default is fine) and click Next.

3. Select the wallet type. For most users, Standard wallet is the right choice. Other options include multisig and hardware wallet integration — covered in the tips section below.

4. Select Create a new seed. On the next screen, choose SegWit as the seed type for lower transaction fees.

5. Electrum will display your seed phrase (12 words by default, or 24 if you select the extended option). Write down every word in order, exactly as shown.

6. Click Next. You will be asked to re-enter your seed phrase to confirm you recorded it correctly.

7. Set a wallet password. This encrypts your wallet file on disk — it is separate from your seed phrase and is required every time you open Electrum on this device.

8. Click Next. Your wallet will load and display its main interface.

Tip: Electrum seed phrases use a proprietary format by default, different from the BIP39 standard used by most other wallets. If you ever need to restore your Electrum wallet in a different app, select BIP39 seed during wallet creation instead — this ensures broader compatibility.

4c. Receiving Bitcoin

1. Click the Receive tab in the top navigation.

2. Electrum will display a receiving address and QR code. You can copy the address or right-click to save the QR code.

3. Optionally enter a description and requested amount to generate a specific payment request.

4. Like BlueWallet, Electrum generates a new address each time — this is by design. All addresses belong to your wallet.

5. Incoming transactions appear in the History tab. Unconfirmed transactions are shown in italics until they receive at least one block confirmation.

4d. Sending Bitcoin

1. Click the Send tab.

2. Paste the recipient's Bitcoin address into the Pay to field.

3. Enter a description (optional but useful for your own records).

4. Enter the amount in BTC or your preferred currency (toggle via Tools → Preferences → Fiat).

5. Set the Fee. Electrum gives you a slider for fee rate (sat/vB) and displays the estimated confirmation time. You can also type a custom rate directly.

6. Click Pay. Enter your wallet password when prompted.

7. Review the transaction details in the confirmation window and click Broadcast to send.

Tip: Enable Replace-By-Fee (RBF) when sending — this allows you to increase the fee on an unconfirmed transaction if you need it confirmed faster. Go to Tools → Preferences → Transactions and check Use Replace-By-Fee.

4e. Advanced features

Coin control

Electrum lets you select exactly which UTXOs (unspent transaction outputs) to use when building a transaction. This is useful for privacy — for example, to avoid combining coins from different sources, which can reveal wallet history on-chain.

1. Go to View → Show Coins to enable the Coins tab.

2. In the Coins tab, right-click any UTXO to freeze it (so it won't be used in future transactions) or manually select specific coins before sending.

Hardware wallet integration

Electrum supports Ledger, Trezor, Coldcard, and other hardware wallets. During wallet creation, select Use a hardware device instead of creating a new seed. Electrum will detect your connected device and load your addresses — your private keys never leave the hardware wallet. 

Multisignature wallets

Electrum supports multisig setups (e.g. requiring 2 of 3 keys to sign a transaction). During wallet creation, select Multi-signature wallet and configure the number of signers and required signatures. This is an advanced feature suited to users who want additional security for larger holdings.

Connecting to your own server

By default, Electrum connects to a random public Electrum server, which can see which addresses you're querying. For maximum privacy:

1. Go to Tools → Network.

2. Uncheck Select server automatically.

3. Enter the address of your own Electrum server (ElectrumX or Fulcrum) running on your own Bitcoin node.

4f. Backing up and restoring

Your seed phrase is your backup. The wallet file on disk is encrypted with your password, but it is not a substitute for your seed phrase — if you lose the file and the seed phrase, your funds are unrecoverable.

Restoring on a new device:

1. Open Electrum and select I already have a seed in the setup wizard.

2. Enter your seed phrase exactly as written. If you used a BIP39 seed, click Options and select BIP39 seed.

3. Select the same wallet type and script type you used during creation (SegWit, Standard).

4. Set a new wallet password. Electrum will scan the blockchain and restore your full transaction history and balance.

4g. Tips & best practices for Electrum

• Download only from electrum.org. This cannot be overstated — fake Electrum apps are one of the most common Bitcoin theft vectors.

• Always verify the GPG signature of downloaded files before installing. The verification instructions are on the Electrum website.

• Use RBF on every transaction. It costs nothing extra and gives you the option to bump fees later if the network becomes congested.

• Enable a strong wallet password. Your password protects the local wallet file. Use a long, unique passphrase stored in a password manager.

• Pair with a hardware wallet for large holdings. Electrum's hardware wallet integration lets you use its full feature set while keeping private keys in cold storage.

• Use coin control for privacy. Avoid merging UTXOs from different sources where possible, especially if those sources came from exchanges that have your identity.

• Keep Electrum updated. New versions address security vulnerabilities and improve fee estimation. Check electrum.org periodically.

• Do not use Electrum's built-in fiat exchange features if privacy is a concern — these connect to third-party price services that may log your IP address.

5. Side-by-side comparison

6. Universal on-chain wallet tips

Security fundamentals

• Store your seed phrase offline — paper or metal only. Never in a notes app, email, cloud storage, or password manager.

• Test your seed phrase recovery before storing significant funds. Restore your wallet on a spare device or in a fresh Electrum install to confirm it works.

• Never share your seed phrase or wallet password with anyone, including support teams.

• If you store a meaningful amount of Bitcoin, consider upgrading to a hardware wallet (e.g. Coldcard, Ledger, Trezor) and using BlueWallet or Electrum as a watch-only interface.

Managing fees on-chain

• Bitcoin transaction fees are determined by market demand for block space, not by the amount being sent. A transfer of 0.001 BTC and one of 1 BTC pay the same fee if they are the same size in bytes.

• Check mempool.space before sending to understand current conditions. If your transaction is not time-sensitive, waiting even a few hours during a congested period can reduce fees substantially.

• During low-congestion periods (often weekends, late nights UTC), fees can drop to near-minimum levels — ideal for consolidating UTXOs or non-urgent transfers.

Privacy considerations

• Every on-chain transaction is permanently recorded on a public blockchain. Use a fresh address for every receipt to reduce address reuse.

• Avoid merging coins from different sources in a single transaction where possible — this can link previously separate wallet activity.

• For maximum privacy, connect your wallet to your own Bitcoin full node rather than a public server.

Troubleshooting common issues

• Transaction stuck as unconfirmed: If you sent with a fee that is too low, and you enabled RBF (Electrum), you can broadcast a replacement transaction with a higher fee. If RBF was not enabled, some wallets support Child-Pays-For-Parent (CPFP) — spending the unconfirmed output with a high-fee transaction to incentivise miners to confirm the parent.

• Balance not showing after restore: Allow the wallet time to fully sync with the blockchain. In Electrum, check Tools → Network to confirm it is connected. In BlueWallet, pull down on the wallet screen to force a refresh.

• Wrong amount shown: Ensure your wallet is connected to an active server and fully synchronised. Discrepancies usually resolve once sync is complete.

• Lost wallet file (Electrum): As long as you have your seed phrase, you can restore your wallet on any device at any time. The wallet file is a convenience, not the backup.

Need help? BlueWallet support: bluewallet.io/support · Electrum documentation: electrum.readthedocs.io

When contacting support, never share your seed phrase or wallet password — describe your issue without including any private key material.