Exercise 24: Set up password protection on Blue Wallet

Blue Wallet offers a password feature similar to Sparrow. However, it’s not exactly the same because in Sparrow, you’re putting the password on one wallet file. In Blue Wallet, though, you’re putting the password on the whole application. Having a password on Blue Wallet gives you an extra layer of security.

Note that the password on Blue Wallet is not like a passphrase. It does not change the private key, and you can still restore the wallet using just the seed phrase, in case you lose or forget your Blue Wallet password.

Follow these steps to set a password on Blue Wallet:

1.     Open Blue Wallet and make sure you’re in the home screen, where all the available wallets are shown.

2.     Click the three dots in the top right corner, and choose Security.

3.     Enable the option for Encrypted and Password Protected.

4.     Blue Wallet will give you a confirmation screen (about only protecting the data on your phone, and not actually the seed phrase). Click I Understand.

5.     Next, enter a secure password, then re-enter it, and click OK. Your Blue Wallet data on your phone is now encrypted and password protected. Be sure to keep the password safe. (But remember, you can still restore the wallet with the backed up seed phrase).

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What are you actually protecting in this step? You’re protecting the data linked with Blue Wallet on your phone. So if your phone were lost or stolen, anyone who has the phone wouldn’t be able to access your Blue Wallet data (depending on how secure your password is).

But it only provides protection for the Blue Wallet data on your phone. What it is not doing is providing any sort of protection for your seed phrase, outside of the phone.

For instance, assume you back up your seed phrase in a secure location, as you should. However, someone with bad intentions still finds that seed phrase. In that situation, the fact that you have a password on Blue Wallet doesn’t help you. Anyone with the backup seed phrase could just restore it to another wallet software, and steal your funds.