Paper Wallets: A Simple Cold Storage Option
- July 24, 2025
- 6:27 pm
Build Your Own Crypto Wallet
What is a Paper Wallet?
A paper wallet is a method of storing cryptocurrency offline by printing out your public and private keys on a piece of paper. It represents a form of “cold storage” because the keys are not stored on a device connected to the internet.
How Do Paper Wallets Work?
- Key Generation: Use a paper wallet generator (explained below) to create a new public key (your wallet address) and a corresponding private key. These keys are mathematically linked.
- Printing: Print the generated keys on a piece of paper. Often, the public and private keys are represented as QR codes for easy scanning.
- Storage: Store the paper wallet in a safe and secure location.
Pros and Cons of Paper Wallets:
- Pros:
- Free and Easy to Create: Paper wallets are a low-cost storage solution.
- Offline Storage: Your keys are stored offline, making them less vulnerable to online hacking attempts.
- Relatively Anonymous: Can be used to receive crypto without linking to personal information.
- Cons:
- Can be Easily Damaged or Lost: Paper is susceptible to fire, water damage, tearing, and fading.
- Not Suitable for Frequent Transactions: Spending from a paper wallet involves importing the private key into a hot wallet, which can be cumbersome and increases the risk of compromise.
- Requires Trusting the Paper Wallet Generator: Using a compromised generator can lead to your keys being stolen.
- Partial Spending is Risky: When spending from a paper wallet, you must spend the entire balance. The remaining balance must be sent to a new address that you control. Not doing this can lead to loss of funds.
Generating a Paper Wallet
- Use a Reputable Generator: Use a well-known and open-source paper wallet generator like BitcoinPaperWallet.com or WalletGenerator.net.
- Generate Offline: Crucially, download the generator’s code and run it offline. This prevents your keys from being sent over the internet. Disconnect your computer from the internet before generating the keys.
- Verify the Code: If you have technical skills, verify the source code of the generator to ensure it’s not malicious.
- Clear Browser Cache: After generating the keys, clear your browser’s cache and history.
Using a Paper Wallet
- Receiving Crypto: To receive cryptocurrency, provide the public key (wallet address) to the sender.
- Spending Crypto: To spend crypto from a paper wallet, you need to import the private key into a software or hardware wallet. This can be done by scanning the QR code or manually entering the private key. This process exposes your private key, so do it with caution.
Best Practices for Paper Wallet Security
- Print on a High-Quality Printer: Use a high-quality printer with fresh ink to ensure the paper wallet is legible.
- Use Acid-Free Paper: Use acid-free paper to prevent the paper wallet from deteriorating over time.
- Store Securely: Store the paper wallet in a safe, dry, and secure location, away from moisture, heat, sunlight, and potential physical threats.
- Consider Laminating: Laminating the paper wallet can protect it from moisture and tearing.
- Avoid Photocopying: Avoid photocopying the paper wallet, as this can create copies that could be compromised.
- Spending the Entire Balance: When spending from a paper wallet, spend the entire balance to a new wallet under your control.
Knowledge Test
- What is a paper wallet and what makes it a form of “cold storage?”
- Why is it crucial to generate a paper wallet offline?
- What are some of the risks associated with using paper wallets?
- When spending from a paper wallet, why is it important to spend the entire balance?
- Name two paper wallet generators recommended for use.
Answers
- Printing keys offline.
- Protect your keys from online exposure.
- Damage, theft, trusting the generator.
- To avoid losing the change.
- BitcoinPaperWallet.com, WalletGenerator.net.