How to store cryptocurrency on paper
It is no secret that picky crypto investors prefer “cold”, that is, offline, cryptocurrency storage to “hot” storage on online wallets. And there are a number of good reasons. This is primarily done for security purposes. Cold crypto wallets provide the highest security of funds, while online services, such as exchanges and blockchain wallets, are vulnerable to cyber attacks. Attackers can easily access the user's money through phishing or through various browser extensions, as was the case, for example, with the Ethereum wallet MyEtherWallet. Desktop versions and hardware wallets can be hacked using virus programs downloaded to a computer.
Another reason lies in the fact that during “hot” storage additional problems can lead to software errors or hardware failures. The “cold” method of storing cryptocurrency will not cause difficulties and will be clear even to beginners. There is a completely radical method - storing cryptocurrencies on Paper. Yes, yes, you heard right. We will talk in more detail in this article about how to safely store Bitcoin and other cryptocurrencies on paper, how to create a paper wallet, replenish it and withdraw money from it.
What is a paper wallet for storing cryptocurrencies
By the principle of organization, paper crypto-wallets do not differ from software ones. To conduct transactions, two keys are used: public and private. The public key contains the address of the blockchain wallet and is used to receive cryptocurrency, and the private key provides access to funds and allows you to transfer funds to other users. Losing a private key will lead to loss of access to the wallet and funds will always remain frozen on the account.
The fundamental difference from software wallets is that the data is not stored in electronic form, but is located on a physical medium - paper. The process is carried out through special integrator sites that generate keys in the form of unique QR codes.
How to create a paper wallet: a simple guide for beginners
To create a paper wallet, it is enough to get the necessary access keys using integrator sites. These keys can be imported into online wallets. Such services on the Internet are enough and finding them is not difficult. Here are some popular ones:
- Walletgenerator.net (multicurrency wallet)
- Paper-wallet.ru (multicurrency)
- Bitaddress.org (Bitcoin)
- MyEtherWallet.com (Ethereum and ERC-20 tokens)
- Liteaddress.org (Litecoin)
- Paper.dash.org (Dashcoin)
It should be noted that for each individual service the procedure may differ, but, in general, the whole process of creating a paper wallet looks approximately the same. In addition, these services contain detailed instructions for creating a wallet and recommendations for the safe storage of cryptocurrency.
Consider the example of the Paper-wallet.ru generator.
Step 1. Choose a cryptocurrency and create a buffer of arbitrary numbers. To do this, just move the mouse cursor until the orange bar is filled.
Step 2. We received the address and private key of our wallet. Now you can send the data to print and the paper wallet is ready. The site states that it is not recommended to save QR codes in a PDF file to avoid information leakage.
How to import a paper wallet
To complete the operations you will need:
- Smartphone with integrated QR code scanner. For older models, you can download them in the application store;
- A mobile wallet for storing cryptocurrencies, for example, TrustWallet, Jaxx, Coinomi and others.
After installing the application, we import a paper wallet. To do this, you need to scan a QR code with a private key. This process is called sweeping. We go into the application and tap on the QR-code icon:
After that click “sweep”And the wallet is integrated. In the Coinomi application, which was used as an example, the process is very simple. In some wallets, for integration, you will need to go to other sections of the settings and find the item “Import My Private Key” or the like, and you may need to enter the keys manually.
Some generator sites support additional encryption methods, such as BIP38. In this case, the keys are printed in encrypted form, and even if the cybercriminal takes possession of the access keys, he will not be able to decrypt them, because in order to import the wallet, you need to decrypt the key through the main online generator.
How to replenish
There are several ways to replenish a paper wallet using a QR code or wallet address:
- Via terminals in cash or by credit card;
- Use exchange services, for example LocalBitcoins or from the list of exchangers on BestChange. When replenishing with this method, a large commission is charged and there are also considerable restrictions on the minimum amount;
- Through cryptocurrency exchanges. To receive cryptocurrency, registration is required. But there is an opportunity to exchange at the exchange rate and withdraw with lower commissions.
You can also replenish and exchange through payment systems, for example, WebMoney or Payeer, but you will have to buy at a disadvantageous rate.
How to withdraw cryptocurrency from a paper wallet
All methods described for replenishing the wallet are also valid for withdrawal, only instead of the address you need to use a QR code with a private key. You must scan the QR code through the wallet’s mobile application, or enter the public and private key manually, and then send the required amount to the specified e-wallet address.
Advantages and disadvantages of paper wallets
The main advantage is high reliability and no risks, since the data is stored only on physical media, which is ideal for long-term investors.
The disadvantages include the possibility of mechanical damage: fire, moisture should be avoided, surface defects may occur, etc. You should also hide the paper from prying eyes so that no one can photograph QR codes.
Another key weakness is impracticality. This type of storage is not suitable for regular transactions - it is suitable exclusively for long-term storage of cryptocurrency.
Some helpful suggestions
- When creating a paper wallet, it is recommended to disconnect from the Internet to exclude the possibility of data interception. In no case should you create a wallet on public networks in order to avoid compromising data;
- It is better to keep several copies of the paper wallet and hide each in a safe place. This will save access if one of the copies is lost;
- You should not carry a paper wallet with you unnecessarily. It can simply be stolen, or it can be left somewhere in a public place with a purse, bag and so on;
- One copy can be laminated, which will avoid surface defects and other kinds of distortion, in particular fading or mashing of paint.
Using paper wallets to store cryptocurrencies is the most reliable and safe, but not suitable for regular transactions, but more intended for long-term storage.
Creating and importing a paper wallet will not be difficult for beginners. As a rule, online resources contain the necessary instructions, otherwise they can always be found on the Internet.
If you strictly follow the instructions and follow the necessary safety measures, then your funds will be safe.