Setup a Bitcoin hardware wallet using Sparrow and Satochip

Satochip
7 min readMay 30, 2024

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This guide explains how to setup a Satochip🔗 hardware wallet with Sparrow to create a secure Bitcoin cold storage solution. If you haven’t read the Quick Start🔗 guide yet, that’s a good place to learn how to install and get introduced to Sparrow.

Your Satochip cold storage solution with Sparrow Wallet

Why use a hardware wallet?

If you’ve followed the Quick Start🔗 guide, you will already have Sparrow running with a software wallet. This is a good place to start getting familiar with sending and receiving Bitcoin transactions, and is a reasonable option to store small amounts.

However, if your balance starts to grow (to the point where you would care about losing it), then it’s time to consider purchasing a hardware wallet🔗.

Hardware wallets offer something that software wallets can’t: they’re electronic devices specifically designed to store your private keys offline and allow you to sign transactions. Its connectivity and functionality are very limited. That’s a good thing, because it means it’s very difficult to hack! In a connected world rife with viruses and other malware, hardware wallets represent a major improvement in securing your bitcoins.

Want to know more about hardware wallet and security, check the Satochip Academy🔗.

Why you should choose Satochip hardware wallet?

Satochip’s core mission is to provide accessible and intuitive hardware and software solutions. Our goal is to empower every individual to store, manage and transact with cryptographic assets such as crypto-currencies, anytime, anywhere and independently.

Your Satochip hardware wallet is:

  • Based on a smartcard equiped with an EAL6+ secure element;
  • Easy to setup with your favorite software client such as Sparrow;
  • Completely open source;
  • Really affordable; check this out!🔗;
  • Supports various currencies, so you can use the same device to hodl all of your crypto assets.
Satochip smartcard hardware wallet

Ordering and receiving

You can buy your new hardware wallet on Satochip’s official website🔗. Always be extra careful and double check that you’re on « satochip.io » before making your purchase.

To store your Bitcoin safely, you will need:

Your Satochip hardware wallet and its smartcard reader

Setting up your Bitcoin wallet with your Satochip smartcard

First, you need to have Sparrow Wallet installed on your computer. For this tutorial, we will guess that this is the case. If not, please follow this guide🔗.

Once Sparrow is installed, you’ll need to insert your Satochip 🔗 card into your card reader, then launch the Sparrow application.

This brings us to the creation of your new bitcoin wallet.

Please note: as with any Bitcoin wallet creation, the process that follows will require you to save your recovery phrase (also known as seedphrase 🔗or mnemonic), so that you can recover access to your funds in the event of loss or theft of your hardware wallet. We suggest you to store your seedphrase using Seedkeeper; your seedphrases and password manager on a smartcard.

Connecting to a server

When you open Sparrow Wallet for the first time, you’ll be asked to choose between connecting to Electrum’s public or private servers. You don’t need to choose anything other than the public connection to quickly set up your wallet and carry out your first transactions.

If you run your own Bitcoin node and care about privacy and anonymity, you’ll probably choose to connect to your own — private — server.

Sparrow Wallet — Connecting to a public server
Sparrow Wallet — Connecting to a public server

Select your hardware wallet

You made your choice!? Great, let’s move on and click on “Create New Wallet” and choose a name for your wallet.

Chose a name for your Bitcoin wallet

You will now see the Sparrow wallet Settings screen. You can leave all of the fields on the defaults and select “Connected Hardware Wallet”.

In the next step, your Satochip 🔗card will appear in the list of hardware wallets detected by Sparrow. At this stage of the procedure, be sure to leave your Satochip in the card reader and click on “Import Keystore”.

Sparrow Wallet — Import the keystore from your Satochip cold storage card

Initialize your Satochip with a PIN code

To secure access to your Satochip hardware wallet, you will be asked to choose a PIN code. Obviously, this code must remain strictly personal to you. It’s also important to store it properly and securely. Sparrow Wallet will ask you to type it twice.

Initialize your Satochip with a PIN code

Once you’ve entered your PIN code, click again on “Import Keystore” to go to the next step.

Generate or import a mnemonic seedphrase

Now we come to the most important step of the procedure. Creating or importing your recovery phrase, also known as seedphrase or mnemonic.

a) You already have a seedphrase? Import it into Sparrow Wallet by typing the 12 or 24 words. Be careful, however, not to import a seedphrase that has been poorly stored or stored in an unsecured environment (eg. unencrypted on your computer
)

b) You don’t have a seedphrase? Click on “Generate New” and you’ll see the words that make up your recovery phrase. You’ll need to write them down and memorize them, then click on “OK” to finish setting up your Satochip hardware wallet.

Generate or import a seedphrase
You’re all set! Congratz.

Congratulations, you just finished to setup your Bitcoin wallet using both the convenience of Sparrow Wallet and the safety of Satochip. You now have total control over your private keys, securely stored inside the Satochip secure element.

Your private keys are now stored within the secure element of your Satochip

Advanced security tips

For additional safety measure, we recommend that you :

- Do not leave your Satochip in the card reader when you are not on your computer;

- Add a password to the wallet you’ve just created (as you will for future wallets, taking care to choose a different strong password for each of your wallets);

Why adding a password to Sparrow in addition to the PIN code you’ve already choose for your Satochip? In fact, your Satochip hardware wallet will safely handle your private keys while the public information such as the transaction history, label addresses
 will remain stored on your computer. Adding a password to the software wallet will ensure you a better privacy.

Please note that your funds remain secure in your Satochip hardware wallet even if you do not enter a password at this stage.

If needed, add a password to lock your software wallet information

Receiving Bitcoin

Your first operation will probably be to retrieve some satoshis from your freshly generated Bitcoin wallet. To do this, simply click on the “Receive” tab and copy the receiving address to forward it to someone or use it on your preferred Bitcoin Exchange, DEX or P2P application.

You can attach a label to each of your addresses. For example, if you need to be paid by several different customers, don’t hesitate to use a unique address for each of them, to separate the payment channels and prevent your customers from easily seeing your other sources of income.

Sparrow Wallet — Receive tab

Sending Bitcoin

Once you’ve received your first bitcoins, you may also want to send some to other recipients, or to another of your wallets.

Nothing could be simpler with Sparrow’s “Send” function, which lets you choose a large number of parameters to determine the priority of your transaction and help you choose the amount of fees you’re ready to pay.

Sparrow Wallet — Receive tab

To validate the transaction, you will need to plug your Satochip hardware wallet to your smart card reader and enter the PIN code to unlock it.

Sparrow is a Bitcoin wallet that is extremely easy to use and offers a number of advanced features, including UTXO management.

Congratulations! You now have a fully functional Bitcoin hardware wallet based on a Satochip smart card that allows you not only to send or receive bitcoins, but also to truly own your bitcoins. Your keys, your coins!

More information


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Satochip
Satochip

Written by Satochip

Hardware devices powered by open source software to let you safely store and manage #Bitcoin and other digital assets, anytime, anywhere - Secure the Future.

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