Frequent news about hacks and people losing money can be overwhelming for traders. A foremost concern for most is how to purchase and store cryptos securely. The right type of cryptocurrency wallet will help secure your digital assets and keep your mind at ease. If you’re planning to buy some cryptocurrencies, a paper wallet is one of the offline storage options available to you.
What is a Crypto Paper Wallet?
A crypto paper wallet is a paper copy of your private and public keys. Unlike your everyday wallet, a crypto paper wallet does not store your coins like a real-world wallet. Instead, it keeps your private and public keys, helping you carry out transactions like sending and receiving money.
How to Create a Crypto Paper Wallet
Creating a paper wallet is pretty straightforward. You can quickly generate one by following the steps below.
1. Visit bitaddress.org.
2. Gently move your mouse around your screen until it shows 100% randomness.
3. Click on Paper Wallet.
4. Choose the number of copies.
5. You can choose to encrypt the wallet with a BIP38 password.
6. Click on generate.
7. Print and enjoy.
How Does a Crypto Paper Wallet Work?
A crypto paper wallet is one of the cheapest types of crypto wallets. A crypto paper wallet works by having a single private key and Bitcoin address generated and printed on a paper from websites like bitaddress.org or bitcoinpaperwallet.com.
Pros and Cons of a Crypto Paper Wallet
- No risk of system failure
With a paper wallet, your paper is in your hands and offline. You don’t have to worry about a software or hardware failure, unlike a hard or soft wallet.
A paper wallet is free. Unlike hardware wallets that cost a couple of bucks, you do not need to spend a dime to generate a paper wallet.
3. Safe from cyber attacks and malware
There are a whole lot of hackers looking to get their hands on your coins online. Keeping your keys offline is a sure way to stay immune from threats.
Damage is perhaps the most apparent disadvantage of a paper wallet. The paper’s ink could fade, the paper can get torn, and there’s the risk of water and fire damage.
- Security risk during setup
Suppose you do not follow the setup processes correctly and use an insecure printer or system with malware. In that case, there is a potential threat of exposing your private keys to hackers.
- Usage problems
For your security, it is ideal you make a new paper wallet after each transaction. Most people find it stressful and reuse the same address. This makes it easy for people to discover your identity by tracing the private key’s signature.
Public and Private Keys
A crypto wallet pair consists of a public and private key pair to help you carry out transactions.
To better understand this, think about a regular vending machine. Anyone can put money into the machine, but not everyone can take it out. Only the owner can access the money with a personalized key.
With crypto transactions, the vending machine is the public key, and the owner's key is the private key. Anyone can use the public key to send you money. But only you should use your private key to send money. Anyone having your private key has access to your coins.
Creating your paper wallet online is highly insecure and may leave you at the mercy of hackers and malware. If you are really serious about protecting your digital assets, you need to use an advanced technique to create an ultra-secure paper wallet. For this process, you need:
- Ubuntu operating system (the OS for the transaction)
- LinuxLive or LiLi (a software to help install the Ubuntu OS on your flash drive; ensure to download the latest version)
- BitAddress (the software to generate the paper wallet)
Step 1: Install Ubuntu on your flash.
Download the LiLi software, open it and insert your flash drive. Ensure that you select the correct drive. Click refresh if the drive is not coming up on the system. Click on ISO/IMG/ZIP and then select the Ubuntu ISO file. Choose only “format the key in FAT32.” A lighting bolt option will appear. Click on it to start the format and installation process.
Tip: During the installation, everything in your flash drive is erased. Ensure you don’t have any essential documents in your flash drive or use a new flash drive.
Step 2: Test your printer offline.
Disconnect your computer from the internet. Check and ensure there is no remote access to the computer. Print a test page to see if your printer is still functional.
Step 3: Run your computer with the Ubuntu flash drive.
Restart your computer and run using Ubuntu from your flash drive.
Clicking F12 or F1 during the booting process will give you the option to choose your operating system (OS) from your flash drive.
Step 4: Connect your printer to the Ubuntu OS.
Set up your printer on the Ubuntu operating system.
Click on system settings (look for a monkey wrench and cogwheel icon).
Click on "printers,” proceed to add your printer, then print out a test page.
Step 5: Go to bitaddress.org.
Download bitaddress source code as a zip file on the lower part of the web page, open the software, generate and print your paper wallet.
Step 6: Create the paper wallet locally on your device.
Open private browsing in Firefox. To do this, right-click and choose “Open a new private window.” Then do the following:
- On the address bar, type in “file://cdrom/bitaddress.org-master/.”
- Click on the link BitAddress.org.html.
- Move your cursor around till the randomness reaches 100.
- From the menu, choose "Paper Wallet.”
- Select how many copies you want to generate.
- Add BIP38 encryption for extra security (optional).
- Print and enjoy your new secure paper wallet.
Where can you use your Crypto Paper Wallet?
Although primarily considered an obsolete way of storing your coins, crypto paper wallets still have their usefulness. For instance, you can:
- Give out your paper wallet loaded with cryptocurrency as a gift card to your loved ones for them to cash out at Coinbase.
- Use your crypto paper wallet for promos like a giveaway or scratch-off cards.
- Even turn the wallet generation process into a short learning and fun activity.
Hot Storage and Cold Storage
Hot storage is storing your cryptocurrencies in a device or platform connected to the internet. Cold storage keeps your cryptos entirely offline. To help you understand how they both differ, let us see a real-world example.
Hot wallets are like the wallet in your pocket or your bank card because it helps you carry out quick and everyday transactions. Cold wallets are used for more long-term purposes and can therefore be likened to your savings account. They are the wallet of choice for large amounts of cryptocurrencies that are not intended to be touched very frequently.
A paper wallet is vulnerable to loss and damage and can be prone to hacks if generated incorrectly. Below are best practices to ensure your paper wallet is safe.
- Keep the private key discreet.
Your Bitcoin address or public key is on your paper wallet’s left side, while your private key is on the right side. Ensure always to keep the right side hidden and discreet.
- Laminate it.
Get your paper wallet laminated to safeguard it from fading and tearing.
- Disaster-proof it.
Thanks to a device like Cryptosteel, you can safely store your paper wallet away from external factors like liquids.
- Create extra copies.
For extra security, you could create different copies of your paper wallet.
Best Cryptocurrency Exchange
If you don’t know which exchange to use for your Bitcoin, check below. We have compiled a list of the best cryptocurrency exchanges to help you achieve your trading or investing goal.
- securely through Coinbase's websiteBest For:Coinbase Learn
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Best Cryptocurrency Wallets
Investing in digital assets is fast becoming one of the popular investment vehicles to drive wealth. Whether you're a traditional investor or just beginning your journey into digital assets investment, below is a list of the best crypto wallets to store your assets.
Is Crypto Paper Wallet a Good Storage Choice?
While most people no longer use paper wallets to store Bitcoin anymore, they can be an excellent offline storage option when done correctly. Do not put all your cryptos on a paper wallet, however. Crypto paper wallets can also serve as gift ideas for holidays or anniversaries.
Frequently Asked Questions
Q. How do I cash in my Bitcoin paper wallet?
To cash in or make withdrawals, you should connect your paper wallet to a live wallet. A live wallet will scan through the paper wallet and transfer coins from the paper wallet to the live wallet.
Q. How much does a Bitcoin wallet cost?
The price of a Bitcoin wallet depends on the type of wallet. You can get a Bitcoin paper wallet for free or you could spend at least $50 to purchase a hardware wallet like Trezor or Ledger.
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