What Is A Paper Wallet?

November 9, 2019

FrederikNielsen
24

What Is A Paper Wallet?

A paper wallet is a special document with which the storage of a virtual coin is ensured. Such storages are in demand among users of crypto networks who own a large number of cryptocurrencies and aim to protect the savings from intruders. The peculiarity of such wallets is the availability of copies of two types of keys (public and private).

The convenience of the store lies in the possibility of using QR codes that provide quick identification and adding keys to the desktop client for conducting operations in a crypto network. What are the features of such wallets? How to create a paper wallet Bitcoin and what is required for this? What safety measures to follow during use? These and a number of other issues will be discussed below.

What are public and hidden keys

To better understand the essence of cryptographic keys, let’s simulate the situation from the real world. Imagine a vending machine. Anyone can throw coins into it. But not everyone will be able to get them back because this requires a special key. The only person who takes money from the device is its owner with a unique key.

In this example, the vending machine symbolizes a public address to which money can be sent to you. You own a device with its own unique hidden key. With it, you get access to the funds and the right to dispose of them at its discretion. The public key is the address to which money is sent to you, and the secret key is what you will use to send the coin to someone else. Remember, only you must know the secret key, otherwise, anyone can use your wallet and send money to any address.

How to make a paper wallet

You will need a program that randomly generates unique private and public keys. This is an open source program, and if you know about programming, you can see for yourself that it doesn’t do anything extra. Moreover, the keys will be created offline so that they do not hit the Internet, and when the job is done, you need to remove the program to get rid of all traces. You do not need to be a programmer or to understand encryption: you need only a computer, a printer, an internet connection and a sheet of paper. First, you need to make sure that there is no malware on your computer. The best is just a new computer, but, of course, not everyone can afford it.

Do you need a paper wallet

The answer to this question depends on the specific circumstances. If you want to spend a summer day trading in currency, then you will not need such a carrier. But if you are going to save money for a long time, for example, you are going on a long journey, then a paper wallet is a great way to keep your savings safe.

Risks of paper wallets

As far as paper carriers are protected from virtual threats, so are they vulnerable to physical ones.

  • Abduction: there are always people who are ready to break the law for the sake of something valuable. Bandits can crack your safe just like hijack Lamborghini. They do not know what is inside, but since it is protected, it means it is valuable.
  • And the moral here is simple – do not shout at every corner about your investments in cryptocurrency. It doesn’t matter whether it’s online or in the real world. Remember.
  • The unreliability of the carrier: after all, it’s just paper. It is easy to damage, and the paint eventually erases. So periodically make copies of the document.
  • Theft: since the keys are written on a sheet, they can be seen, photographed and stolen your money.
  • Disasters: a sheet of paper is not protected from natural disasters and can be easily destroyed if you have not made backup copies.

Conclusion

The use of a paper wallet is relevant for those cases where the holder of a cryptocurrency focuses on long-term investments and does not plan to frequently conduct transactions with coins. Despite a number of security advantages, paper vaults have a number of disadvantages that are important to remember before registering. But you have to tinker to prevent physical trouble: the loss, theft or damage to secret keys. Always keep their location secret and install new storage in case of minimal suspicion of privacy vulnerabilities.

The best solution is diversification. As the old saying goes: “Don’t keep all your eggs in one basket.” Always distribute them. Keep a part of the currency (most) in paper wallets, just in case, make backup copies.

Frederik Nielsen
Frederik Nielsen

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.

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