What is a Paper Wallet?
A Crypto paper wallet is a way of storing cryptocurrencies offline in cold storage. To have a paper wallet, users must print out their public address and private keys on a piece of paper and securely them.
Private keys are for your eyes only. Do not share them with anyone and do not ask for somebody else to make transactions for you. Ignore all proposals or requests that involve you sharing your private key with a third party.
Key Takeaways
• The reason many cryptocurrency holders use a paper wallet is that they don’t need to worry about a piece of hardware or a piece of software failing all they need to take care of is a piece of paper.
• Paper wallets are the safest long-term storage for crypto coins, Bitcoins in particular. This is because it is not always safe to store your cryptocurrencies online or in exchange. After all, they are often hacked. Even having a live wallet on a computer has its risks.
For people who have an understanding of cryptocurrencies, where to store them could become an issue. It normally takes some time to get your head around the fact that when you own a cryptocurrency, you don’t possess it in a tangible form.
Having a crypto paper wallet means the address that holds the cryptocurrency isn’t yet connected to the blockchain. This means it is not active until you enter the information online and your wallet is connected to the live blockchain. At this stage, it is called cold storage.
Crypto paper wallets can be generated using services like Bitcoin paper wallet, which allows users to create a random Bitcoin address and private key. A document is then prepared which should be printed out and kept in a safe place, away from water and dampness so no damage occurs.
SEE ALSO: Can a Hardware Wallet Truly Get Hacked Without PINs?
Pros of Crypto Paper Wallets
The reason many cryptocurrency holders use a paper wallet is that they don’t need to worry about a piece of hardware or a piece of software failing all they need to take care of is a piece of paper. They are classed as the most secure method of holding cryptocurrencies that is if you don’t intend to spend them.
Users can create a crypto paper wallet easily on Wallet Generator. As soon as the setup process is complete, all traces of your data will be deleted from the website.
Paper wallets are the safest long-term storage for crypto coins, Bitcoins in particular. This is because it is not always safe to store your cryptocurrencies online or in exchange. After all, they are often hacked. Even having a live wallet on a computer can cause risks.
By printing a tamper-resistant wallet, it allows you to minimize exposure to hackers as well as untrustworthy people in your home or office life. However, it is important to keep the wallet safe the same way you would with expensive jewelry or cash.
SEE ALSO: 5 Top Reasons Multisig Wallets Outperform Traditional Digital Wallets
Cons of Crypto Paper Wallet
Alongside all of the advantages of paper wallets, they have certain flaws too. They are known to be a little more confusing and complicated than other wallets. They can be harder to set up, and if the paper is lost and a backup copy hasn’t been produced, there is no way of restoring your access to your cryptocurrency.
If the currency is needed for regular trading or purchase purposes, then it is not ideal. It can be a major hassle to access your cryptocurrency through a paper wallet. This means if you are not familiar with how they work, it could result in you locking yourself out and losing access to your crypto.
How Do I Send Cryptocurrencies from a Paper Wallet?
The “spend” side of the paper is used to transfer funds into any of the common crypto wallet applications that support this feature. When you scan the QR code on the spending side of the paper with your wallet app, you will likely be prompted to send or “sweep” these funds to a new address on your wallet.
How Do I Receive Cryptocurrencies to a Paper Wallet?
The other side of the paper wallet is the “receive” address, which is like any other receive address you might generate using the receive function on your wallet.
You can send funds to this address, and then sweep them to be used later at a time of your choosing. You should always take certain precautions using paper wallets.
SEE ALSO: How to Backup Your Hardware Wallet – Best Practices
Paper Wallet Precautions
1. Paper is fragile and printer ink will eventually fade, so it is not recommended to store cryptocurrencies on paper wallets for an extended period.
2. The fact that the private “spend” key is printed on the piece of paper allows anyone in close enough proximity to see it to potentially sweep the funds into a wallet on their device.
3. Do not take pictures or share your paper wallet with anyone.
Frequently Asked Questions (FAQ)
1. Are paper wallets worth it?
Paper wallets are worth it as they are considered an extremely secure way to keep cryptocurrencies safe from cyber-attacks, malware, etc. But it’s important to remember that it’s not the cryptocurrencies that are being printed out like regular currency. Thus, cryptocurrencies themselves are not stored offline; the important keys are stored offline.
2. Is XRP Paper Wallet Safe?
XRP paper wallet is one of the most trustworthy wallets in the crypto space, which helps store and transact with XRP tokens very securely. You just make sure that your private key is not being shared with anyone else. And keep it somewhere, where it can’t be destroyed, as it’s fragile.
3. How do you preserve a Paper Wallet?
Store your paper wallets in Ziploc bags or laminate them. Don’t let water or aging make your wallet unreadable. To be 100% sure your computer won’t leak your private keys over the internet, use an OS that never goes online.
4. Are Paper Wallets Obsolete?
In some ways, the printed method of storing keys was a distinct improvement over purely online storage methods back in 2011.
However, paper wallets are now considered more of a middle step in cryptocurrency evolution. Deterministic methods and hardware wallets have rendered the crypto paper wallet obsolete.
SEE ALSO: 5 Best Ethereum Wallets for Safe trading and Storage
Final Thoughts
Crypto wallets are one of the efficient ways of storing your cryptocurrencies and keeping them safe from hackers and cybercriminals.
It is also important that private keys are kept safe and should not be disclosed to anyone other than yourself. Doing so might cause you to cease to gain access permanently to your cryptocurrencies if the keys become compromised.
Read More
