Bitcoin for Savers Wallets and keys

Wallets, keys and seed phrases

A wallet doesn't hold coins; it holds keys. Learn what you can share, what you must never share, and how to back up your seed phrase.

15 minBeginner3 / 8

Draft: this lesson is still waiting for review.

What you'll learn

Explain what a wallet really stores
Tell the difference between an address you can share and a private key or seed phrase you must never share
Make a safe paper backup of a seed phrase

Key terms

wallet (pochi): An app or device that stores your keys and lets you send and receive bitcoin. It doesn't hold the coins themselves.
private key (ufunguo binafsi): A secret number that signs your payments. Never give it to anyone.
public key (ufunguo wa umma): A number derived from your private key. Others use it to check your signature without learning your secret.
address (anwani): A string you give someone so they can send you bitcoin, like an M-Pesa phone number.
seed phrase (maneno ya siri): 12 or 24 words that can restore every key in your wallet. Whoever knows them owns the money.
backup (nakala ya akiba): A copy of your seed phrase kept somewhere safe so you can restore your wallet.

When Achieng lost her phone, she panicked: "My bitcoin is gone!" It wasn't. Her bitcoin was never inside the phone. Because she had written down twelve words on paper, she installed the wallet app on a new phone, typed the words in, and everything came back.

What a wallet really stores

Your bitcoin lives on the blockchain, the shared record kept by nodes around the world. A wallet is an app or device that stores the keys that let you spend it.

A private key is a secret number. It signs your payments, like a signature on a cheque that nobody can forge.
A public key is made from the private key. From it, the wallet makes an address, which is what you give people so they can pay you.

Thing	Like	Share it?
Address	Your M-Pesa number	Yes
Private key	Your signature and PIN together	Never
Seed phrase	The master copy of every key	Never

The seed phrase

Most wallets show you 12 or 24 ordinary words when you first set them up. This seed phrase can recreate every key the wallet will ever make. Whoever knows these words owns the money, on any phone, anywhere, forever. There is no customer care that can reset it.

Making a good backup

A backup is only useful if it survives and stays secret:

Write the words on paper, in order, with their numbers. Check every word twice.
Never photograph them, never type them into WhatsApp, email or notes, and never store them in the cloud.
Keep the paper somewhere safe from fire, water and curious eyes. Some people keep a second copy in a different trusted place.
Before saving much, test it: restore the wallet from the words with a small amount in it.

Try it

Practise with pretend words, not a real wallet. Open any book, pick 12 random words, and write them in order on a card with their numbers. Hide the card. In a week, find it and read the words back. Was it easy to find? Was every word readable? Then tear it up.

Reflect

Write your answer down, or talk it over with a friend or your chama.

Explain to a friend, without using the word 'key', why your seed phrase is more important than your phone.
Where in your home would a paper backup be safe from fire, water, children and visitors?