As the name implies, a paper wallet is a non-custodial wallet with your private and public keys printed on a piece of paper.
Paper wallets are considered a considerably safer means of storing your cryptocurrencies. In fact, they were popularly used as a cold wallet option before the introduction of hardware wallets.
Yet, in certain circumstances, they are better than hot wallet storage options since they store your assets offline. This way, nobody can access or hack them.
Paper wallets can also contain barcodes that holders can scan to access their assets. The main catch is that – once they are inaccessible to any other person, your assets are safe.
Popular hardware wallets, which are the most secure types of wallets, are relatively expensive. Most hardware wallets range between $50 to $70.
Meanwhile, their accessibility depends on your location because shipping a hardware wallet to a location that is not readily available may take time. Therefore, the need for an alternate cold wallet option.
While many think paper wallets are risks, they are better than hot wallets. Thus, you need to know how to set up and use them. Fortunately, this article will go through a detailed guide about paper wallets, how they work and how to set up a paper wallet.
How Paper Wallet Works?
A paper wallet is a type of cryptocurrency wallet, a device where you can store your private/public keys and access your cryptographic assets.
However, for paper wallets, your keys are printed out on a piece of paper by a paper wallet provider or generator. Paper wallets considerably provide a good level of security because your keys are printed out of your digital wallet when needed only.
As such, paper wallets are not vulnerable to hacking or exploitation. However, the caveat is that paper wallets can be easily damaged or taken by anyone.
Meanwhile, removing your keys from your digital wallet also means if you misplace them, you may not be able to gain access to your crypto wallet and assets again.
Usually, paper wallets are created by generators online. They generate the wallet and enable you to print the keys and QR code on paper. Anytime you’d like to access your asset, you can scan the QR on any non-custodial digital wallet or manually input your private keys.
Considerations With Paper Waller
As mentioned earlier, paper wallets have been considered a good cold wallet storage and a safe way to access cryptocurrency for years. However, as you would have imagined with paper, paper wallets are susceptible to physical and environmental damage, degradation, or even misplacement.
Therefore, they have considerably fallen out of use. Still, many people use them today as an alternative to low-accessible and expensive hardware wallets. However, before using paper wallets, there are many things you should consider. They include:
The main characteristic of a good wallet is invincibility from cyber attacks or hacks. In today’s world, cyber-attacks on crypto wallets are almost inevitable. In fact, billions of dollars were lost to wallet hacks and exploitation in 2022.
The notable ones are the Ronin Bridge exploitation and the Phantom Wallet hack. Therefore, it is important to keep your devices clean from malware.
Also, when printing your wallet, ensure you turn off all wireless components of your device and don’t use public WiFi. Do not take pictures of your paper wallet because hackers can potentially hack your device and access the photos.
Storing Your Paper Wallet
Creating safe and reliable physical storage for your paper wallet is also important. As mentioned earlier, once you lose it without a backup, you may not be able to access your wallet again.
Once you create your paper wallet, store it in a paper-proof, damp-proof, and waterproof safe. Consider using a safe deposit box in a bank if the assets in your paper wallet are too huge to be kept at home.
How to Create a Paper Wallet?
Now that you have a good idea of the basics, it’s time to create your first paper wallet. There are many paper wallet generators or providers. All you have to do is figure out the best one to use.
Some of the best Paper Wallet generators include:
- Mycelium Entropy
Here’s a detailed guide on how to generate a Paper Wallet with a generator:
- Go to the paper wallet generator website
- Generate paper wallet
- Print paper wallet out
1. Go to the paper wallet generator website
To start creating a paper wallet, go to any preferred paper wallet generator.
- For walletgenerator – go to https://walletgenerator.net/
- For BitAddress – go to https://www.bitaddress.org/
- For Mycelium Entropy USB-to-Paper wallet, order one at https://mycelium.com/mycelium-entropy.html
Using walletgenerator and BitAddress is almost similar. You can generate a new wallet with total randomness from the homepage.
However, the Mycelium Entropy wallet is a USB wallet that can only print out paper wallets. Therefore, you must buy a Mycelium Entropy USB wallet, insert it inside your printer and get a paper wallet.
2. Generate paper wallet
If you’re using walletgenerator or BitAddress, move your mouse randomly on the homepage or type any random letter in the small text box provided in the top right corner of the screen.
Continue typing or moving your mouse until the number counts to 0 for walletgenerator and 100% for BitAddress.
Afterward, a new wallet address containing your public and private keys and QR codes will be generated. For both generators, you can create a single wallet, paper wallet, bulk wallet, or brain wallet.
3. Print paper wallet out
Once the wallet has been generated, you can now print under a high-setting printer.
Ensure you connect your PC device and print directly rather than saving it as a PDF first because hackers can potentially attack it.
Keep the paper as directed above when not in use.
How to Import Paper Wallet?
To import your paper wallet to deposit or access your crypto asset:
- Download a digital hot wallet
- Import private keys
- Use wallet
1. Download a digital hot wallet
A paper wallet only allows you to store your keys rather than access your assets. You need a digital software wallet on your mobile phone or PC to access your assets.
Some of the best software wallets you can use include Guarda wallet, Metamask wallet, Coinbase wallet, or Atonic wallet.
You can download any of these wallets on your mobile phone via Google Play Store for Android devices and App Store for iPhone devices.
They are readily available on Google Chrome Extension Webstore for Chrome browsers and PC devices.
2. Import private keys
After downloading, open the wallet to start setting up. Click on ALREADY HAVE A WALLET on the setup page to import your paper wallet with the private keys.
You can manually write the private keys or scan the QR code of your private keys. Unfortunately, many software wallets don’t have the option to scan QR codes. Therefore you’d have to write your private keys manually.
3. Use wallet
Once you’re in, you can do anything you want with your wallet and assets.
If you’d like to transfer your assets, copy and paste the recipient deposit address in the field provided.
For deposits, you can always use the public keys of your paper wallet.
Once you’re done using the software wallet on your PC or mobile device, ensure you log out to avoid exposing your asset to potential threats.
Should You Use a Paper Wallet?
A paper wallet is a secure way to access your crypto assets and store your keys. They are the most suitable option at the early stages of cryptocurrency. If you can create and store them very well, they are a cost-effective option. They are also immune to any cyber attack.
However, experts don’t recommend using paper wallets due to the introduction of better hardware wallet options. Meanwhile, many wallet generators are out there, so ensure you only use trusted and reliable generators.
Aside from this, ensure your printer is in good condition before printing your keys. This will prevent the characters from fading out too quickly. Finally, keep your paper wallet as safe as possible, and you’ll enjoy unbeatable security.