April 23, 2019, | AtoZ Markets - Against the background of a growing number of the hacked crypto exchanges, the digital assets holders tend to search for the alternative ways of storing their private keys. Certain crypto owners turn to a paper bitcoin wallet’s usage.
Paper bitcoin wallet in a brief
For long-term storage of bitcoins, it is not safe to store bitcoins in an exchange or online wallet. These types of sites are regularly hacked. A paper bitcoin wallet is a counterpart to an online wallet that provides crypto security in offline or so-called cold storage (a reliable place to store bitcoins, which does not have access to the Internet and therefore cannot be hacked).
However, it is necessary to take into account that if someone gets access to the secret key of a paper wallet, you can lose all your coins. Therefore, it is important to pay close attention to storing data.
Pros and Cons of Paper Bitcoin Wallet
- Bitcoins can be lost only when someone physically steals your paper wallet.
- Easy to create and to store
- Bitcoins can be spent without using software or hardware wallet.
- Usually free to set up
- Paper has limited durability and life.
- If someone steals a paper wallet and it is not BIP38 encrypted, you will lose your bitcoins.
How to make a bitcoin wallet step by step
There are a large number of online resources that offer paper wallets generation services. With their help, you can create, a bitcoin address, and generate an image containing several QR codes. We took BitAddress.org resource as one of the most common examples to create a bitcoin paper wallet. Below we describe the main steps that need to be taken.
- Generate a new bitcoin address on the BitAddress.org resource. The address is created randomly by moving the mouse cursor on the webpage;
- When a so-called bitcoin address randomness reaches 100 %, you will be taken to another page and will see your bitcoin paper wallet draft with two QR codes. The first on the left side of the screen is the public address used to receive the coins. The second on right is a private key, which is used to spend a cryptocurrency.
- Go to the “Paper wallet” tab, select the required number of addresses for a subsequent generation.
- Select “Generate” and create a new bitcoin address;
- After creating your bitcoin address, click “Print” to print it. If there is no printer near you, you can save the paper bitcoin wallet in PDF format.
- Install the QR code scanner on your smartphone and scan the QR code, which is usually located on the left side of the bitcoin paper wallet. Thus, you will get your own deposit, where bitcoins will be “cold stored”.
- Now you need to scan the QR code located on the right of the paper wallet. This is the private key that you need to import into your wallet.
- If you decide to use the BIP38 encryption system, then the procedure for dealing with a private key will be different. After scanning the QR code on the right, it is necessary to return to the BitAddress.org website, where to go to Wallet Details. Next, you need to enter the received code and get your private key.
How to use a bitcoin paper wallet
Depositing money to a paper bitcoin wallet is possible in one of the following ways - via local storage, using an online wallet or from an exchange platform. The most convenient option is through a mobile phone application, for example, Copay Bitcoin Wallet. The main requirement for the program - the presence of the function Sweep Paper Wallet.
- Enter the application Copay Bitcoin Wallet. Its feature is the ability to use Bitcoin for shopping.
- Put the phone camera opposite the QR code to read it
- The mobile application will convert the QR code into a public address where the money will be sent.
- Check if the line on the piece of the paper coincides with the “input path” on the mobile device. It is important to be extremely attentive.
- Select the number of bitcoins to send and click on the appropriate button.
- Check the balance and make sure that the money is credited. How to do this, tell below.
How to check the balance on a paper bitcoin wallet
Another important point that you need to know is how to check the balance of a paper wallet Bitcoin. To do this, take the following steps:
- Scan the QR code of the public address. For these purposes, you can use any software.
- Copy the private key.
- Go to the site blockchain.info. or blockexplorer.com
- Enter your bitcoin address into the search line and click on search.
- Check the account size and transactions. If you don’t have a special scanner to read the QR code, you can manually enter it in the search box. But here it is important to be careful not to be mistaken in numbers and letters.
- Scan or enter a private key on the web, except for situations with the withdrawal of money is prohibited. When checking the account, it is recommended to use only the public key, because if you ignore this requirement, the probability of losing all funds from the wallet is high.
Where to keep a paper bitcoin wallet
- Keep the wallet in a place that is not accessible to outsiders.
- Do not place a personal key or QR code online.
- Protect paper storage from mechanical effects - temperature extremes, moisture, and others.
- Make a paper wallet on your own PC, which should be free of viruses or other malicious programs. It is recommended to check the computer before performing the operation.
- Work through sites that use the BIP38 system. In this case, the confidence in the security of the transaction is higher. It is important to write the address of the resource in different places.
- Before creating a paper storage Bitcoin exit the web. This requirement applies not only to the PC but also to the printer.
- After the work is completed, delete the index.html file from the computer.
- To protect the paper storage laminate it (if possible). Such protection makes the wallet for moisture and minor mechanical effects impregnable.
- When printing the code, use a laser printer that provides the best print quality. Over time, a picture made with the help of such a device does not lose quality and does not fade.
- Make 2-3 copies and store them in different places. At the same time, you cannot carry a Bitcoin paper wallet with you or keep it in a visible place.
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