A Bitcoin wallet consists of two so-called keys. The public key is the wallet address, by means of which other people can send Bitcoins to the corresponding wallet. The private key, on the other hand, allows bitcoins to be sent to other people.
The combination of the recipient’s public key and private key makes a transaction of cryptocurrencies possible. If someone gets hold of the private key of a wallet, that person can withdraw the coins on the wallet. Therefore, it is strongly recommended to keep the private key as secret and secure as possible.
If you store coins in an online wallet or in a hard disk-based software wallet, there are possible security risks such as hacker or malware attacks. Furthermore, a stolen PC or a hard drive crash could cause the coins in the wallet to be irretrievably lost. A paper wallet, on the other hand, can protect the user from such scenarios. A paper wallet is a document that contains copies of the public and private keys of the wallet. More often than not, a paper wallet also contains QR codes that can be scanned to complete a transaction. The advantage of a paper wallet is that the keys are not stored digitally, so they cannot become the target of a cyber attack or hardware failure. A disadvantage is that paper can also be lost.
Is the Bitcoin Paper Wallet secure?
The Bitcoin Paper Wallet experiences are mostly positive. In fact, many people appreciate the external storage of Bitcoins. Writing them down on a piece of paper is probably the rustic variant among the external storage options. In fact, a relatively large number of crypto-savvy people already use paper wallets to secure Bitcoin paper wallets cryptocurrencies such as primarily Bitcoins or Altcoins. Especially, people who assume economic recession often rely on securing Bitcoin Paper Wallet cryptocurrencies on paper.
According to Bitcoin Paper Wallet experiences, how secure Bitcoin Paper Wallets are depends on the following factors:
- Did anyone watch the Bitcoin Paper Wallet being created?
- Was the computer 100% free of viruses, Trojans and spying software when the Bitcoin Paper Wallet was created? In rare cases, according to our Bitcoin Paper Wallet experiences, cyber criminals use the printer. If you want to be on the safe side, disconnect the printer from a possible Internet connection.
- Is the Bitcoin Paper Wallet ultimately stored in a safe? After all, according to the Bitcoin Paper Wallet experiences of some users, a fire in the room can be enough to destroy their crypto assets forever.
Keeping in mind the implications and risks of storing a large amount of money, precautions should be taken regarding the creation and storage of a paper wallet.
- No one should be watching how to create a wallet.
- BitAddress and LiteAddress offer private key encryption through the BIP38 algorithm.
- This provides two-factor authorization for paper wallets.
- To eliminate any risk of spyware, a freshly set up operating system should be used. A good option is to install a USB stick or DVD with a LiveCD Linux distribution.
- Once the Paper Wallet has been set up by the website, it should be possible to run the website code offline. Therefore, the computer should be taken offline before the private and public keys are generated.
- For the extra cautious, it is recommended to print the Paper Wallet only on a printer that is not connected to the network.
Tips for keeping a Paper Wallet safe
- Store the Paper Wallet in a sealed plastic bag to protect it from water and moisture.
- Laminate the Paper Wallet to make it more resistant to moisture.
- Store the Paper Wallet in a safe to protect it from theft and fire.
- Store the Paper Wallet securely with a notary public.
- In addition, to ensure availability, you could store a Wallet in multiple locations, such as one with a trusted person and another in a safe deposit box.
Exporting private keys from Altcoin wallets
If you want to use a paper wallet for a lesser-known cryptocurrency that does not have an address generator on a website, there are alternatives for this. Every altcoin has about a variation of a bitcoin qt wallet application:
- First, go to the Receive tab, which lists the wallet addresses.
- Right click on the address to be saved and copy to the clipboard.
- Click on the Help menu and then on Debug.
- In the Console tab, type “dumpprivkey” and paste the wallet address.
- The console will then display the private key of the wallet.
Now you get the public and private key of the wallet. These can now be printed out. However, the wallet details still exist on the computer. The only way to delete them is to open the file explorer and go to the path and delete the wallet.dat file there.
Warning: this will result in deleting all addresses that this software wallet contains. Also, make sure that there are no more funds on the other addresses that will be deleted.
The following steps are necessary to create a Paper Wallet
- To generate a new bitcoin address, first open BitAddress.org in your browser (or LiteAddress.org for Litecoin).
- BitAddress (but not LiteAddress) now asks for some random input, and the user must either enter random letters or move the mouse pointer around.
The public and private keys of the paper wallet and their QR codes are displayed. Do not scan.
- Now one clicks on the Paper Wallet tab.
- There, select the number of addresses to generate (addresses to generate).
- Now click on the Generate button to create new wallets.
- Once the wallets are generated, click Print to create a paper copy.
- The browser will now ask which printer to use. In the case of Google Chrome, the page can also be saved as a PDF file.
- Now one writes down the public address or scans the QR code of the public address into a Bitcoin app (or Litecoin app) and transfers the desired number of coins to the paper wallet.
- For users of the Blockchain.info website, there is also a basic paper wallet option. To do this, first click on the import/export option and then on the paper wallet link in the left menu.
Another paper wallet provider is Bitcoinpaperwallet.com. The website offers a tamper-proof design of a paper wallet. It is also possible to order holographic labels that indicate that the corresponding wallet has not been counterfeited. In addition, a live-boot Ubuntu CD with pre-installed paper wallet software is offered there.