There are many methods of storing your Bitcoin and keeping it secure. One of the oldest methods is a Bitcoin paper wallet. This type of wallet has fallen out of favor with many Bitcoin enthusiasts, but it is still used by those who don’t feel comfortable using a web wallet. This Bitcoin wallet, like any other, has its pros and cons. Here are some important things you should known about a paper wallet for Bitcoin.
About Bitcoin Paper Wallets
Among the various methods to store Bitcoin, a paper wallet is classified as a form of cold storage. This means that the wallet functions as an offline mechanism. Paper wallets are considered to be one of the most secure forms of storage for Bitcoin because they are a bearer instrument. Only the person who holds the paper that forms the wallet can access the Bitcoin.
In a non-technical sense, a paper wallet involves what could be considered printing out Bitcoin. The token has no physical existence, of course, but a paper wallet is the closest thing to making Bitcoin a tangible asset. The private keys and Bitcoin addresses of a wallet are printed onto a piece of paper, often in the form of a QR code. In some cases, the private key is used to generate the public key and the public key creates the Bitcoin addresses that are required to send and receive the cryptocurrency.
When these wallets are properly constructed and cared for, they can be an almost impenetrable method of Bitcoin storage. The biggest cons with the paper wallet are that pieces of paper can be lost. They can be discarded, accidentally washed, or stolen if left lying around. This means that individuals who choose to use them should either make a backup or store them securely in a safe location.
The generation of keys for a paper wallet is typically done with an Internet browser, so there is no Internet transmission of the data. A user would then print out the wallet, making sure to clear their browser and remove any associated image files. It is not advised to keep a paper wallet on a computer or phone. This would defeat the entire purpose of the wallet.
Some paper wallet have a nice design that allows them to be folded. The paper wallet can then be placed in a regular wallet so that you always have it handy. Again, losing the paper wallet means that you will lose access to your trove of Bitcoin.
How to Make a Bitcoin Paper Wallet
The most common way to make a Bitcoin paper wallet is to use an online service like Bitaddress.org or Walletgenerator.net. A simple Google search will reveal a number of different services that one can use. Most of these platforms are open-source random key and address generators. They use JavaScript to create the keys with a browser, and no data is transmitted over the Internet. Most of them will allow you to move your mouse around to scramble the keys until you are satisfied with the number generation. Once you’ve generated the keys you’ll be taken to a screen where the wallet can be printed.
Even with a Bitcoin paper wallet you can still check your balance by entering the public key into the search box at blockchain.info. You may also be able to import the data from your paper wallet into another web wallet if you so desire.
Here is a list of things that you will need if you want to make and use a Bitcoin paper wallet:
- Access to the Internet
- A printer with ink and printer paper
- A pair of scissors
- A smartphone with a QR code reader (for sending)
- A web wallet containing Bitcoin (for transfer if desired)
- A USB stick (optional)
The last item on this list is useful for those who want to save the image of the paper wallet to an external device. You could put the image of the paper wallet on the USB stick and then store the stick in a safe location. That way you would have a backup version of the paper wallet in the event you lose your original. It cannot be overstated that protection of the paper wallet is a must.
Using Your Bitcoin Paper Wallet
Your paper wallet will come with two QR codes. One of these is for sending and the other is for receiving. The first thing you will probably want to do is load your paper wallet with Bitcoin you have stored in another type of wallet. All you need to do in this case is simply send the Bitcoins from an existing wallet to the receive address of your paper wallet. The process is very simple.
For spending, all you need to do is scan the appropriate QR code and enter the receiving address of the person or business receiving the Bitcoin. This takes only a few moments and transactions are generally processed very quickly.
Pros of a Bitcoin Paper Wallet
- Can be used as a temporary way to send Bitcoin, much like a gift card
- Very easy to carry – just put in your regular wallet like cash
- Only theft or loss of the paper wallet can threaten your Bitcoin
- Very easy to make
- Very easy to store
- Free to create
Cons of a Bitcoin Paper Wallet
- Paper can be easily destroyed or damaged
- Private keys can be accidentally revealed
- Failing to use advanced encryption means that theft can occur
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