USB Drive

Creating a Bitcoin Bank in Less Than Thirty Minutes With a $2 USB Drive

There are multiple ways people can store bitcoins offline, using either a paper wallet or hardware options from companies like Trezor, Opendime, Ledger, and Keepkey. However, bitcoin users can also create a bitcoin wallet on a far cheaper USB thumb drive as well to store coins offline.

Also Read: How Much Does it Cost to Run a Full Node?

Creating an Inexpensive Bitcoin Wallet USB Thumb Drive

Today we’re going to detail how to create a secure bitcoin wallet with an inexpensive USB drive. There are a few different wallets you can download for this particular operation, but for this walkthrough, we will use an Electrum wallet. Other lightweight bitcoin clients used should follow a similar installation process.

Creating a Bitcoin Bank in Less Than Thirty Minutes With a $2 USB Drive
Download the installer to the USB drive folder. For peace of mind and better security, it is best to create a bootable USB using a Linux OS distro and installing a wallet like Electrum or Multibit directly to the bootable operating system. The same process can be applied to a CD or DVD-ROM as well, and not a flash memory based USB device. The choice is yours.

The first thing you want to do is download the Electrum wallet to your computer. The software can be used on Mac OS, Windows and Linux systems and takes only a few minutes to download. To maximize security users should add an operating system (OS) to the flash drive. This means creating a bootable USB stick with an OS like the privacy-centric Tails or Ubuntu

Without adding a bootable OS, wallet data may be stored elsewhere on the computer or be vulnerable to malware if your computer is infected. A bootable drive is a thousand times more secure than a simple offline installation. The next step after downloading the wallet software is to install it directly on the USB drive’s OS offline. It’s not the best idea to use the USB thumb drive for any other online applications, and the drive should be utilized solely as a bitcoin wallet, but of course, that’s optional.

Creating a Bitcoin Bank in Less Than Thirty Minutes With a $2 USB Drive
Choose what kind of wallet this will be; standard, two-factor, and multi-signature. You can also name the wallet.

Installing the Wallet Into the USB Drive Offline

Following the USB drive installation, you can opt to shut off your internet services and local area connection to perform the installation offline. It’s a good idea to safely remove the USB and restart your computer as well before installation. After a system reboot and you are sure your operating system is offline you can then plug the USB device back into the computer for the next steps. If you chose to add a Linux OS to the flash drive, after the internet is shut down you can boot up the OS on the USB with confidence because you are using a fresh operating system offline. Following the reboot proceed to the next steps.

Creating a Bitcoin Bank in Less Than Thirty Minutes With a $2 USB Drive
Create a strong password to encrypt the wallet, then choose “create a new seed.”

Next, after the OS boots up navigate to the USB drive folder and open the installer program for the wallet. The client won’t be able to connect to the Bitcoin network, but you can still create a new wallet. The installation procedure is the same, and the new wallet app needs to be installed into the USB drive’s operating system as well. Then, you’ll be directed through the security section where you should create a strong password and write down your seed phrase. Always remember if you lose the password or seed phrase you will not be able to recover your bitcoins on that wallet.

A Cheap Little Bank or Bearer Bond Instrument

Creating a Bitcoin Bank in Less Than Thirty Minutes With a $2 USB Drive
Your new USB thumb drive bitcoin wallet is now complete. For those interested in learning how to create portable encrypted USB with ‘Puppy Linux’ and Electrum check out this great tutorial here. The process will be similar with other Linux distro installations.

After you secure your wallet with an encrypted passphrase and get your seed, you will then have a fresh new wallet that can send and receive bitcoins. Just like a hardware wallet, you will need the device to access your keys, and you will also be able to restore it with a seed if the USB stick was lost, damaged or stolen. This method can cost you less than $2 for a generic USB drive which is far cheaper than $60-150 hardware products. A simple installation without a bootable system is less secure than using a live cd with an OS like tails but that’s entirely your security choice. Further, with some directions, flash drives can also be used as a bearer bond instrument by just handing someone some bitcoin off-chain.

Have you tried installing a bitcoin wallet to a blank USB drive? Let us know about your experience in the comments below.

Disclaimer: Walkthrough editorials are intended for informational purposes only. There are multiple security risks and methods that are ultimately made by the decisions of the user. There are various steps mentioned in reviews and guides and some of them are optional. Neither nor the author is responsible for any losses, mistakes, skipped steps or security measures not taken, as the ultimate decision-making process to do any of these things is solely the reader’s responsibility. For good measure always cross-reference guides with other walkthroughs found online.   

Images via and Jamie Redman. 

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  • Λψ Σεργκει

    After instal Jaxx wallet to usb.
    Jaxx created files on usb & on OS-disk.

  • Dennis Knudsen

    Still working (6th day) on restoring my multibit wallet I saved on a thumb drive- I have all my wallet words, but it will not restore wallet nor accept a new password.

    • radact

      Are you having trouble opening your wallet file with Multibit Classic too? Mine recently started resyncing every time I open the wallet, annoying, but all the transactions are there. Electrum can import the keys from Multibit if you select “Use Private or Public Keys” when you install it. You’ll need to export your keys unencrypted to a file beforehand though. Maybe a good idea to switch to Electrum or Multibit HD instead.

      • Dennis Knudsen

        Actually, it is using MultiBit HD .5.1 I’ve tried many different wallets using my wallet words on Electrum, Breadbox, etc, but no luck so far. Right now I have a generated transaction list from Mnemonic Code Converter, but I’ve only been thru 1000 or so of those files, looking for addresses with my BTC on them, then will use the new private key to import into coinbase.

        • Holy cow, what is going so wrong? Are you sure you have the right words? This should not happen…

          • Dennis Knudsen

            Yeah, I’m sure. They enable the “verify” checkmark in multibit, so they are correct.

          • What does the blockchain(s) show as your balances, if you still have the wallet addresses?

          • Dennis Knudsen

            I don’t have the addresses- am trying to re-create them with Mnemonic Code Converter, but I have no idea what I’m doing.

          • I hope you didn’t have much money in the wallet, it may be a lost cause. You did give the wallets time to sync with the network after entering in the mnemonics, right? Until then, except for light wallets, they don’t know the value.

          • Dennis Knudsen

            The wallets have had plenty time to sync, but am now entering the generated private keys into Electrum as a sweep- is this right?

          • Normally, but I would freeze all assets if I had cause to believe there was loss. No more operations until I did a full audit of what the situation is, as you could compound your problem. But, yes, it should ‘sweep’ them into a single (new) wallet in most cases afaik.

          • Dennis Knudsen

            I’ve swept over 1000 private key addresses- no results- am I doing this correctly, or am I wasting my time?

          • Who knows? There is no Bitcoin Support department.

  • Mattyoung

    A bearer cash card?
    I doubt it. I should be able to disconnect my computer from the internet. Take my friend USB wallet and my USB wallet and transfer between the two with no network calls. After all, it should all be bearer cash once it is in the wallet.

    • disqus_veU9IvX9tc

      You’re mistakenly assuming that a bitcoin wallet is used to store bitcoins. It’s not!

      Bitcoins are *not* stored in a wallet, they’re ‘stored’ (for want of a better word) on a globally distributed ledger. A bitcoin wallet is used to store the private keys that are required to move BTC out of given addresses on the ledger.

  • I use Tails OS on USB. I have yet to give electrum a try. Tails might help with using the other wallets or problems I see posted.

  • Fun Diplomat Channel

    Simply NO! Im happy with Trezor and Keepkey. You get what you pay for!

  • yclick4

    Worst idea ever…

  • David

    Most wallet apps, store theres credential on the startup volume. Its a joke to install the wallet application on a USB Stick. The crucial data is mostly situated somewhere else.

    • This is actually true. Most store in the user application data dir (varies by OS). Maybe you can over-ride this, maybe that step is listed somewhere and I missed it, but otherwise the wallet is stored with the OS. If you wanted this sort of setup, you should install an OS to the USB thumb-drive, not just a wallet.

      • disqus_veU9IvX9tc

        The electrum wallet has an option, “-D”, that lets the user specify the name of the directory to be usde by electrum as its data directory.

  • Mauro

    with windows i created differents vhd disk for wallets, encrypted with bitlocker (compatible mode), and stored in differnt usb keys

  • Joe

    People who follow your advice in good faith may lose their funds. I am not at all sure that you might not be liable for the loss.

  • Daniel Elliott

    which download should one get for a USB drive? The standalone or the portable?

    • Portable (small as the end of a fingernail) are easily lost.l I would go FULL size and market it carefully, always keep in same place, etc… How would you feel if you lost this USB drive? In fact, I’d have a duplicate just in case, in case or safety box at the bank.

  • This is insane!

  • b_ran

    I like to use Kodachi linux distro. Same procedure except all you need to do is create bootable thumb drive like with unetbootin, rufus, or universal-usb-installer. Then just download kodachi ISO and done. Run live from shutdown computer and already comes prepacked with electrum on board. Also as a bonus has free VPN and Tor as well. Kodachi rulz!!!