Exercise 6: Create wallet Bob

In this step, you’ll create the Bob wallet—a completely new wallet, with its own seed phrase. You’re doing this so that you can simulate having another, separate bitcoin user. In future exercises, you’ll practice sending bitcoin from Alice to Bob.

1.     Click on File > New Wallet. For the wallet name, type “Bob”, and click Create Wallet. In the Settings window, leave everything at the defaults.

2.     Below in the Keystores area of the Settings window, choose New or imported software wallet.

3.     In the next window, look for the button that says Use 24 words and click the arrow to the right. Choose Use 12 words instead.

4.     A screen will pop up with 12 blank spaces for your words. Click Generate New to have Sparrow auto-generate them, and ignore the “Use passphrase?” option. Now Sparrow has generated a list of random words for your seed phrase.

5.     Write down the words on a sheet of paper, numbering them correctly. Label the words on the paper “Bob Seed phrase”.

6.     Once you’ve written down the words, click on Confirm Backup. Confirm on the next screen that you’ve written them down, and click Re-enter Words.

7.     In this next screen, re-enter the 12 words. Then click on Create Keystore, then Import Keystore in the top right.

8.     Now back at the Settings screen, you need to apply all the changes you’ve made. Click Apply, on the bottom right. In the Wallet Password screen that comes up next, click No Password.

With these steps you’ve created a second bitcoin wallet on Sparrow, one that we’ll use for sending and receiving along with your first wallet, Alice.

Learn more: Privacy and security

So far, you’ve created two wallets with separate seed phrases, the Alice and Bob wallets. (The Alice Recovery wallet was based on the Alice wallet seed phrase).

Seed phrases in bitcoin are very important to keep private and secure. You also need to back the seed phrase up properly. There’s lots of information to absorb on this topic, and bitcoiners often discuss it at great length.

Later on in this book, we’ll go into this topic in more depth. For now, though, don’t worry too much about privacy and security. The wallets that you’re creating now are both small and temporary, so security isn’t that much of a concern. You only need to be as careful as you would be for the same amount of cash.

But when you have long-term wallets that will contain larger amounts of bitcoin, you need to be more aware of security. There’s an upcoming section later on, with more information on keeping your seed phrase safe.