A paper wallet is an early method used to protect bitcoin offline. Better methods have replaced it, but people still use paper wallets to store bitcoin safely and cheaply.
What is a paper wallet?
A paper wallet is a document or physical object that contains a new public address and a private key that has been printed. It allows its users to store the bitcoin sent from another wallet for better custody. Paper wallets are considered non-custodial cold storage because users control the private keys that can and should be printed offline, thus eliminating the risks of exposing them to hackers from an internet connection.
There is only one way for a malicious actor to get hold of your private key and steal your funds: to gain physical control of your piece of paper where the private key is printed.
While paper wallets have declined in use over the years as digitally secure devices such as hardware wallets have replaced them, they still have some traction among Bitcoiners due to their security and affordability. Today, they are mainly used as Bitcoin ATM receipts.
How do they work
Dedicated generating apps are used to create paper wallets; they print out a public address to receive bitcoin and a private key that you need to prove ownership and therefore spend your bitcoin. The wallet or paper document can also have a QR code embedded so it can be easily scanned and signed to complete a transaction.
(fountain: Github)
It is strongly recommended that any paper wallet generator app be used offline to prevent hackers from detecting the private key. Another good practice would be to scan your computer or smartphone with security software to establish if it has been compromised by malware or any other cyber attack.
Some paper wallet generators will offer the option to save private and public keys to your computer in PDF format. This is strongly discouraged because a PDF is constantly exposed to online threats. Similarly, digital images or scans of your wallets should be avoided to avoid detection by hackers.
Also, make sure your device’s wireless and Bluetooth are turned off because hackers can exploit those signals to access your device.
You should take more steps to protect funds stored in paper wallets. In addition to working offline when generating a paper wallet, it would be a good idea to print the document from a device connected to a printer via a wired connection rather than wireless. After printing, be sure to discard anything that might digitally store the keys during or after the generation process.
Also, you can create and use multiple paper wallets, that is, generate a different wallet for the expenses you pay with bitcoins and use different ones for long-term bitcoin storage.
Advantages and disadvantages
advantages:
Paper wallets have some advantages, including:
- Maximum protection against cyber attacks, hardware failures, bugs and operating system crashes, to name a few.
- Useful for long-term storage of funds.
- They can easily be produced as gifts, though tell me open and satellite card They are better gifting solutions nowadays.
- It is easy to generate and print them.
Disadvantages:
They also have the following drawbacks:
- In case of loss, theft or degradation of the paper, the user will never be able to access the address where their funds are. If you choose this method, make sure you have a safe deposit box or other secure storage method for your paper wallet.
- Destruction can also occur in the event of flood and fire, two main points of failure.
- The private key must be imported into the software at some point in order to move the bitcoin, unlike hardware wallets.
- By withdrawing part of your funds, you risk losing the remaining balance due to the way Bitcoin treats changes in transactions.
(fountain: Reddit)
Considerations:
Paper wallets are easy to recover and you can get and store your private keys in a matter of minutes if you need quick and easy protection for your bitcoin asset.
However, they have been superseded by more practical and secure methods, such as hardware wallets that still work offline. Like paper wallets, they are very secure but do not suffer from risks such as the possible destruction of paper documents.
Storage:
Paper wallet storage should probably be the number one concern for your users, as paper is fragile, perishable, and easy to lose. Therefore, it must be kept with the utmost care in safe, fireproof and waterproof boxes or third-party safekeeping boxes.
You should also protect your paper wallet from being lost or stolen, and it is recommended that you make at least two copies and store them securely, certainly not online. You should also consider laminating your paper wallet. When doing so, make sure that you do it securely and that your private keys are not exposed to malicious actors.
Impression:
Before you print your private keys, you should find out anything that might go wrong with your machine and anticipate the problem. For example, paper jams, ink smears, or a misaligned printer head can cause problems when creating your paper wallet.
It is best to ensure the creation of your paper wallet with a well-functioning printer and on a sturdy sheet of paper, as paper deterioration is the main reason people refrain from using this type of storage. Also, don’t print to a public or work computer and clear your print queue afterwards. You can print something else afterwards to make sure the print queue is actually cleared.
Summary
While paper wallets used to be a feasible solution for early adopters of bitcoin who wanted to store their assets securely, today there are safer and more convenient methods, such as hardware wallets, that eliminate the inefficiencies of paper wallets. paper.
People still use them to test the method and temporarily store bitcoins until they find a more suitable solution. More precautions are required when using online tools to transfer or store data online. If you must use a paper wallet, it is recommended that you follow the guidelines in this article to stay safe.
