Table of Contents
What is a paper wallet?
A paper wallet is exactly what it is says, a wallet on paper. The main idea of this kind of wallet is you putting your private keys on a piece of paper making sure that this private key is stored safely. This way nobody can get hold of your private key unless they manage to get hold of that piece of paper. Therefore is is strongly advised to keep this piece of paper in a very safe place where it won’t dissapear (vault, bank, hole in the ground,…).
How do you use a paper wallet?
It works exactly as a regular wallet. The moment you want to send cryptocurrency to your paper wallet you can simply send your coins to the public key displayed on the wallet. You can check this public key address when you want to check the balance of your wallet.
When you want to sell the contents of your paper wallet you have to create an online wallet and import your private key of the paper wallet into it. By doing this you have online access to your former paper wallet and can send the cryptocurrency to other addresses.
Why should I use a paper wallet?
Keeping a paper wallet is known to be very secure, perhaps even the safest way to store your cryptocurrencies. However, it is important to realize that it is not the cryptocurrencies that you keep offline, but the important wallet information like your private key.
By storing your cryptocurrencies this way, you make it virtually impossible for cyber and malware attacks. This because the access code to your wallet (private key) cannot be found anywhere on the internet or on your computer.
How do you create a wallet?
You can create a paper wallet simply by using an open source wallet generator. A site where you can generate a wallet is for example, BitAddress.org
When you are going to create a paper wallet, it is wise to do a comprehensive malware check first. You should turn off your internet when your public and private key are being generated and delete your internet history afterwards.
Ideally, you should even create a paper wallet on a completely new and unused computer to make sure there is no malware present. Below is a step-by-step guide to create a paper wallet;
- Start with a comprehensive malware check.
- Go to BitAddress.org
- Now generate your keys by making sure the counter reaches 100%. While generating your public and private key it is wise to turn off your internet connection.
- Your private key will consist of 51 randomly generated characters, also your public key will appear.
- When your public and private key have been generated, print them out and delete both your internet history and the history of your printer.
- Send your cryptocurrencies to the public key and then store your paper wallet safely.
Conclusion
Paper wallets are perhaps the safest way to store your cryptocurrencies. If you create this wallet correctly and store your keys in a safe place, your wallet is impossible to hack. However, creating a paper wallet is more of a hassle than creating and using other types of wallets. You have to decide for yourself which degree of security and which wallet-type suits you best.