How to set up a Bitcoin wallet

The recovery phrase, in detail

Your recovery phrase — twelve or twenty-four ordinary English words in a specific order — is the actual asset. Everything else is replaceable. If someone else gets those words, they get your Bitcoin, immediately and irreversibly. If you lose them and lose the device, your Bitcoin is gone permanently.

Two rules cover almost all of it.

It never gets typed into anything except the wallet itself, during setup or recovery. Not a website, not a support chat, not a spreadsheet, not a form claiming to validate or migrate your wallet. There is no circumstance in which a legitimate service needs it. If something is asking, it is stealing.

It never exists in digital form. No photographs, because photos sync to cloud accounts and cloud accounts get compromised through passwords that leaked somewhere else years ago. No password manager entries, for the same reason at one remove. No text to yourself. Pen and paper beats every digital option here, which is an unusual thing to be true in 2026 and is nonetheless true.

Beyond that: two copies in two different buildings, because one copy means a single fire or burglary ends your access. For larger amounts, a steel backup plate resists fire and water in a way paper does not, and The Bitcoin Shop in Tauranga stocks them locally. The full treatment is in our seed phrase backup guide.

Your first transaction

Once the wallet is set up and the restore is verified, you need to get Bitcoin into it. In New Zealand that means buying on a platform and withdrawing, and the withdrawal is where the mistakes happen.

Get the receiving address from your wallet. On a hardware wallet, confirm that the same address appears on the device's own screen — this comparison is the specific defence against clipboard-hijacking malware, which replaces a pasted address with the attacker's while matching the first and last few characters so a quick glance passes.

Check the network. For Bitcoin this is usually simple, but exchanges sometimes offer Bitcoin on multiple networks and choosing wrong makes recovery difficult or impossible. Bitcoin to a Bitcoin address on the Bitcoin network. Nothing clever.

Send ten or twenty dollars first. Wait for it to confirm and appear in your wallet. It may take a few minutes. Then send the rest. The test transaction costs you a network fee of a few cents to a few dollars depending on congestion, and it is the cheapest insurance you will ever buy. Our exchange-to-wallet guide covers the whole flow, including memos and the specific traps on other chains.

What to do in the first week

Four things, and then you can stop thinking about it.

Get the second backup copy out of your house. A family member's place, a workplace safe, a private vault. Most New Zealand banks have exited the safe deposit business — New Zealand Vault took over ANZ, BNZ and National Bank's box operations, and Westpac still offers boxes — so a sealed envelope at a sibling's house is a perfectly reasonable answer. Our city pages list what actually exists in each region.

Start a simple record. Date, amount, NZD value, and what the transaction was. Inland Revenue treats cryptoassets as property and requires you to be able to calculate the New Zealand dollar value of your transactions. From 1 April 2026 the platforms either side of your wallet report to IRD under the Crypto-Asset Reporting Framework, with the first reports due by 30 June 2027 — but nobody reports for your self-custody wallet, so your own records need to reconcile. A spreadsheet is fine. See our tax and CARF guide. General information, not tax advice.

Write a note for whoever inherits this. Not the phrase itself in your will — wills can become public through probate — but a sealed instruction held with your will explaining what exists, where the backups are, and what to do. Twenty-four words with no explanation is nearly useless to a non-technical beneficiary.

Read the scams guide. Genuinely. You have now done the technically difficult part correctly, and from here the only realistic way you lose this money is by being convinced to hand it over. Fifteen minutes on how wallets actually get drained is the best remaining use of your attention.