A paper wallet is one the most popular and safest options to store your bitcoins. But before we go into the details paper wallet, we’d want you to know what is a Bitcoin wallet and why do you need one.
A Bitcoin wallet is a digital wallet that is used to store coins and make transactions; similar to a traditional bank account.
The wallet consists of two keys: A public key and a private key.
- Public key: Your address on which other users send coins to you.
- Private key: Which you use to send bitcoins to others. They key is kept private and only the owner of the wallet knows about it.
The combination of public and private key is what makes a bitcoin transaction possible.
It is important that no one knows about your private key , otherwise, it would give some unwanted entities the access to your wallet, which puts your coins at the risk of theft.
So, if you are using an online or an offline wallet, you’ll be vulnerable to hacking/malware attacks as your keystrokes can easily be logged.
Moreover, a stolen PC or losing your hard drive means you can wave bye to your digital assets for good.
Utilized with care, a paper wallet can shield you against these possibilities.
What is a Paper Wallet?
A paper wallet consists of the public and private keys that make up the wallet in a documented form.
It often has a QR code, so that you can quickly scan it and add the keys into a wallet to perform a transaction.
The prime benefit of having a paper wallet is that it doesn’t store the keys digitally; making it immune to cyber-attacks or a hardware failure.
A downside of the paper wallet is that it’s delicate and must be kept away fire and water.
How to Create a Paper Wallet:
- Open your favorite browser and go to BitAddress.org
- After typing some random characters to create randomness, you will be presented with a QR code, a private key, and a public key.
- Click the tab “paper wallet”
- Select the number of addresses to generate
- Click “generate” button for creating new wallets
- Once the wallet is generated, print it out to make a hard copy
- Make a note of public addresses
- Scan the QR code in your Bitcoin app to start depositing funds
What Are Some Security Tips for Paper Wallet?
Due to the fact that these wallets are used to save large amounts of money, it’s necessary to take precautions and make it as secure as possible.
The list of some useful tips for protecting your bitcoin wallet (paper) includes:
- Make sure no one sees you while creating a wallet
- BitAdress uses an algorithm named BIP38 to support encryption of private keys. The algorithm utilizes two-factor authentication i.e. something you have (paper wallet) and a passphrase.
- Use a clean operating system such as Ubuntu to eliminate the risk of a spyware monitoring your activity.
- Laminate your wallet or store it in a sealed plastic bag to protect it from water/damp.
- Store it in a locker to protect it from theft.
Follow these tips and your paper wallet would be safer than ever.