Sparrow Wallet is a popular Bitcoin software wallet that offers many advanced features. You can use it as a watch-only wallet or connect it to your BitBox02 to securely manage and sign your transactions.

This guide will show you how to set up your BitBox02 with Sparrow Wallet for the first time.

Before you start

To ensure a smooth setup, please check the following first:

• Prepare your BitBox02: Your BitBox02 should already be set up using the BitBoxApp and updated to the latest firmware. You can find instructions on how to update here: How to update the BitBox02 firmware 
• Install Sparrow Wallet: Make sure you have the latest version of Sparrow Wallet installed from their official website.
• Close the BitBoxApp: It is very important that the BitBoxApp is completely closed. If the app is open, it will prevent Sparrow from connecting to your BitBox02.

Step-by-step connection guide

1. Open Sparrow Wallet. On the welcome screen, click New Wallet.

2. A window will open asking for a wallet name. Enter a name you will recognize, for example, "My BitBox02", and then click Create Wallet. This will create a new tab for this wallet in Sparrow.

3. In the next screen, select Connect Hardware Wallet.

4. A new window will appear. Now is the time to connect your BitBox02 to your computer. Once connected, click the Scan button.

5. You will be prompted to enter your device password on the BitBox02 to unlock it.
6. If this is the first time you are connecting your BitBox02 to Sparrow, you will need to confirm a pairing code on both the Sparrow software and on your BitBox02 screen. Make sure they match before confirming.

7. Once your BitBox02 is unlocked and connected to Sparrow, click the down arrow next to 'Import Keystore' to see a list of your accounts. For a standard setup, select the first one ('Keystore #0'), which corresponds to your first account in the BitBoxApp. After reviewing the wallet details, click the 'Import Keystore' button.

8. For the most common setup, you'll want to use these settings.
   1. Policy Type: Keep this set to Single Signature. This is the correct choice for an individual user's wallet.
   2. Script Type: Select Native Segwit (P2WPKH). This is the modern Bitcoin address format that results in lower transaction fees.
   3. Derivation & Descriptor: Don't worry about these fields. You can leave them as they are, as the default values are correct for a standard wallet.

9. Once you have confirmed the settings, click Apply.
10. Sparrow will ask if you want to set a password for this wallet file. This is optional and only encrypts the wallet file on your computer. You can add a password or click Use No Password.

11. Your BitBox02 is now successfully connected to Sparrow! You will see that the sidebar on the left is now blue and fully accessible, allowing you to manage your Bitcoin.

For a more detailed look into what is happening under the hood during this process, read our blog post: Peek into Bitcoin internals using Sparrow Wallet with your BitBox02. 

You can also consult the official Sparrow docs.

Frequently Asked Questions (FAQ)

Why won't Sparrow Wallet find my BitBox02?

The most common reason is that the BitBoxApp is still running in the background. Please make sure the BitBoxApp is completely closed before you open Sparrow and try connecting your device again.

What is a Keystore?

You can think of a keystore as an account. Your BitBox02 can manage multiple independent accounts, all derived from your single recovery seed. Keystore #0 is the first and most commonly used account, just like in the BitBoxApp.

Do I still need the BitBoxApp if I use Sparrow?

Yes, you should keep the BitBoxApp installed. You will need it to update the firmware on your BitBox02 and to manage other coins besides Bitcoin. However, the BitBoxApp and Sparrow cannot be open at the same time, as they will conflict.