How To Set Up The Safest, Free And Easy-To-Use Ethereum Wallet
Finally bought into some Ethereum but feel that a hardware wallet (eg. Ledger Nano S) is out of your budget? Then this one is for you.
Plus, I’ll show you how to set it up, back it up, and send/receive with it.
This will save you many hours of researching and justifying what is the best wallet that has excellent security, free-to-use and is easy to set up. With recent exchange hacks and wallet thefts, this is something you might want to take note of even if you’re considering or already own a hardware wallet.
Before you read, share this to your loved ones as it might be just in time to save their investments from being stolen!
First of all, I will always advice owning a branded hardware wallet like mentioned above as it is by far the safest means to prevent your coins from getting stolen. Assuming you keep your private keys or 12/24 key phrases safe.
A good rule of thumb to know if your investment has grown big enough for you to get a concrete hardware wallet will be the 5% rule.
For the 5% rule, if the total cost (purchase + shipping + tax + etc.) of the hardware wallet that you want to buy costs more than 5% of your overall investment value, it is “out of your budget” and not practically worth for you at the time of calculation.
The 5% Rule:
If [ [Total Costs of wallet] / [Total Investment Value] X 100% ] is more than 5%, NOT practically worth. Otherwise, if is less than 5%, go get yourself one.
This rule has worked really well for me and my peers to sleep in peace at night, knowing our investments are in the safest possible place.
Why not a fixed investment value before the purchase?
Because situations happen, like now where there is no new stock being shipped by Ledger, the market selling at way above the retail price due to over-demand meeting limited supply. Hence, this 5% rule will come handy to ensure you do not overspend on the wallet and under invest in the coin itself.
Moving on to the actual thing you’re here for: The safest possible, free, easy to set up wallet to hold your Ethers.
Official Ethereum wallets
The most important thing to look for will definitely be security. Because if not for that, you would have stored it in your exchange – why bother withdrawing from your exchange to keep in a wallet that is just as safe?
Hence looking at first party official list of Ethereum wallets:
This narrowed down our search to just two, with the webthree-umbrella no longer maintained, even if it works, it is a BIG NO in terms of security-wise.
Both the wallets are currently maintained by the Ethereum Foundation, meaning that they are the always being taken care of directly by the Ethereum community and team themselves. A BIG BIG plus.
So should we use Mist which is officially marketed as “The Ethereum Wallet”, or should we go for Geth which allows us to full ethereum node network?
For this, we will move on to our next check – Are they both free?
Are Mist and Geth Ethereum wallets free to use?
This is straightforward – YES and YES.
Both software are open-sourced and provided by the Ethereum Foundation on GitHub. They are and will always be free to download and use because the community loves us and the software just provides a mean to access the Ethereum network in order to transact or view your wallet’s Ethereum count.
Conclusion: Both passed the “free for life” factor.
The last factor that both of them needs to be compared with will be if they are easy to use for normal people like us. Having a hard to operate wallet is like having a Ferrari but not knowing how to drive a car.
Which is easier for me to use? Mist or Geth?
I am believe a typical reader on my blog does not have any programming experience. But to be fair to everyone, I am going to cater this part for both sides.
If you have some programming knowledge, here’s something that might be relevant for you before you decide which one to go for.
If you are comfortable with the language and open platform, and would like to get your hands dirty in securing your Ethers in a lower level, you will love Geth. Purely for the fun in making it work without the need of a GUI.
Now for those without programming knowledge, I guess you should already know what you want to use.
Mist is simple to set up with a pretty graphic user interface created for you. Look! How pretty!
I’ve decided to use Mist Ethereum Wallet, how do I set it up?
Don’t worry. I’ll be guiding you all from ground up.
1. Preparing your system for an Ethereum Wallet
These are the things that I highly recommend you to do before you go ahead to set up your Ethereum wallet:
Never use a public computer to access your Ethereum wallet
The latest version will be at the top. As of writing, the latest version is “Ethereum Wallet and Mist 0.9.3” as shown below.
Click on the one made for your operating system to download. (Eg. I downloaded ‘Ethereum-Wallet-win64-0-9-3.zip’ as I am running on Windows 10 64bit)
It might take a couple of minutes to be downloaded.
3. Unzip/uncompress the downloaded folder and run Ethereum Wallet
After unzipping/uncompressing the downloaded folder, open the folder and dig for the file “Ethereum Wallet.exe“. Run it.
4. Setting up your wallet
While it is downloading the blocks in the background, you can continue setting up your wallet.
Click on “USE THE MAIN NETWORK“.
When asked if you have a wallet file, Click on “SKIP“.
When asked to protect your account, key in a strong password that only you will know and never used anywhere else before.
IMPORTANT NOTE: Having this password will mean having access to ALL the Ethers inside the wallet. Subsequently, losing this password will mean losing access to ALL the Ethers. Hence, if you must, write the password down but make sure to keep it REALLY REALLY SAFE.
Once password entered twice, click “NEXT“.
Click on “OK“.
You can safely close this window and reopen the client to view your account dashboard in the next step!
5. Relaunch Ethereum Wallet
Since you have successfully installed it previously, you can launch the client now.
You will be greeting with an elegant UI as seen below.
Congratulations. You have successfully created your own Ethereum wallet!!
So far it has been safe, free and easy to use. #MissionAccomplished
NOTE: Please wait for download of the blocks to be completed (shown in % at the top bar of the Mist UI) before you proceed to deposit or withdraw anything. This prevents any buggy execution which might lose your coins.
Now before you go ahead all out to deposit all your Ethers into this new wallet, you might want to test if the whole works, if so, how it works.
I will briefly go through how you can test it.
Testing my new Mist Ethereum Wallet
1. Test deposit
Log into your exchange or brokerage that you bought your Ethers from.
Depending on your brokerage or exchange that you use, there should be an Ether withdrawal option.
After you click to withdraw by Ether, you should be shown a page to fill in a deposit address and an amount. Just try to deposit a small amount of Ether (eg. 0.01 ETH). This address (shown in red box below) can be found when you click on the main account from Mist Ethereum Wallet dashboard.
This is the public key of your Ethereum wallet, and can be shared with little to no problem.
Treat it like your bank account number. It will be needed for others to transfer money into it.
Once deposited from your exchange to the address, give it a couple of minutes to show up in your Mist Ethereum Wallet.
2. Test withdrawal
Ether received! Now that depositing works, try withdraw the same amount back to your brokerage or exchange account.
To withdraw out the Ethers, click on ‘SEND‘ at the top menu of Mist Ethereum Wallet.
Similarly, you will need to key the the destination public address, which in this case, your exchange/brokerage’s account public key. Usually you will have to make a request deposit on your broker/exchange side to obtain that public key.
After keying in the ‘TO‘ publick key of your exchange/broker, and the amount of ETH to send, verify details and then click ‘SEND‘.
Once sent, give it a couple of minutes to show up in your exchange/brokerage.
If everything goes smoothly, you should see the Ethers back in your brokerage/exchange account and be assured that your wallet works perfectly fine and that you have mastered the art of Ethereum walleting. 🙂
Now before you go run around telling everyone that you are a Master of Ethereum Walleting, you almost forgot one thing. A VERY important thing to do…
How to back up your Mist Ethereum Wallet
In order for you (or anyone) to have full access to your Mist Ethereum Wallet, you (or they) need just two things:
The password you used to create the ‘account’
The keystore file
As said earlier, the password should be a strong and hard-to-brute-force-but-easy-to-remember password to make sure brute force is close to impossible. You can write this down on a piece of paper and keep it safe in case you forgot your password a few years from now.
The keystore file to backup can easily be downloaded through Mist Ethereum Wallet platform.
Click on File > Backup > Accounts.
Double click to open keystore folder.
For each account you have on Mist Ethereum Wallet, you will have one “UTC…..” keystore file.
Back them up by copying and pasting into an external drive that preferably only you can access, even better if you can keep it in your safe box. You won’t want your keystore file to be shared around even though without knowing your password, the Ethers in your wallet cannot be manipulated.
Now you have two copies of keystore file (Mist, external drive) and one hardcopy of your password inside a safe.
The following are strongly encouraged recommendations by me to best safeguard your Ethers from theft, hacks and social engineering:
Keep your hardcopy written password in your safe (or similar, with a secure lock). Do not write any other information on the same piece of paper (eg. “ETH”, “MIST”, etc.) so even if someone gets their hands on this paper, they do not know what it is for.
Have a second hardcopy written password kept in another safe LOCATION (not your house) so in case of natural disasters, your backup hardcopy password is not gone. A second location might be hard to think of, but it will greatly increase your chances of not losing your Ethers if you ever forget your password. Hardcopy written password is always preferred due to malwares having ability to source from all your system files to use into trying to break into your accounts online/on Mist (if your system ever get infected).
Get the cheapest global branded (for reliability) thumbdrive to store all your keystore files (if you have many accounts), keep it in your safe and not use it.
Same for second backup of keystore files. Do not back up the keystore file to any cloud service. It will be most vulnerable on cloud. Store the second thumbdrive somewhere outside of your home as well. Office, car boot, in-laws house, etc.
That’s all. You’ve completed everything you need to know about setting up, maintaining, testing and backing up of your Ethereum wallet!
I really hope this whole thing has helped you.
If you would be kind enough to treat me a cuppa coffee for my work, I am accepting donations in Ethers at this address: 0x8d6A495bC00Ddf8Ac45df738ab3b53BE892044e1
Don’t forget to share this to everyone important to you as this might be just in time to save their Ethers too!!
Are you a blogger or influencer? Want to join this movement to save more Ethers from getting stolen?
I’ve got ideas on how we can collaborate! Contact me – theia[at]theiablog.com