When it comes to storing your crypto, there are three options for you to choose from. Hot wallets, cold wallets, and paper wallets. There isn’t a limit on the number of wallets you can own or which types.
In fact, it’s overwhelmingly a good idea to have multiple wallets of different types for extra security. As the saying goes, “don’t put all your eggs in one basket”.
Of course, different wallet types offer different advantages and require different ways of handling, so let’s take a look at paper wallets in this article to help you have a full understanding of what it means and if paper wallets are a good idea.
What Is a Crypto Wallet?
A crypto wallet is a place where you can safely store your private and public keys. These keys are the only way you can make transfers out of your wallet to another which is why it’s paramount that owners keep the keys safe.
If someone else has access to these keys, they can then transfer crypto from your wallet to themselves or a third party.
What Is a Paper Wallet?
Just as it sounds, a paper wallet is a piece of paper on which your public key and private key are printed. Some paper wallets have a scannable code created by an app that then shows you your keys rather than having them directly on the paper.
A paper wallet is there to store your crypto offline. When you print out your keys, your currency remains but the keys are removed from the network.
However, keep in mind that once they have been removed from the network and your account you’ll not be able to get them back if you lose your piece of paper.
Before cryptocurrency became popular, storage technology wasn’t at the high level like it is now and paper wallet was generally the most popular option for investors at the time.
However, despite the options for storage being more and the features and safety being higher, paper wallets are still a valid and good choice for many especially since unlike online wallets they cannot be hacked.
Creating a Scannable Code
If you prefer to have a scannable code such as a QR code on the paper rather than the keys then this is easy enough to do.
You’ll need to use a paper wallet generator app, one that is legit and frequently used by others. You should also ensure your device has the latest antivirus and malware detector just as a backup. Finally, disconnect from the internet while using the app and generating the code.
Once you have generated your barcode or QR code, you can just print it out and keep it safe, under lock and key, and somewhere fireproof until you need it. To use the paper wallet, simply scan the code using your phone’s built-in scanner.
What to Consider Before Using a Paper Wallet
While paper wallets are incredibly secure in the sense they can’t get hacked, their vulnerability to the environment such as fire and flooding, the ease at which they can be lost, or general degradation over time has meant that fewer people use them than before.
Of course, there are ways to prevent these issues such as using a bank’s safety deposit box, for example, but there are other aspects you should consider as well before you head down the paper wallet route.
While this may not be the biggest issue in the world, problems with printing should be something you should think about before settling on having a paper wallet.
Printers seem to be one of the least reliable pieces of technology we have in our homes. Between the paper jams, update issues, and ink spots, your piece of paper can come out virtually unintelligible.
Added to this, some paper wallets will only give you one chance to print before the keys are deleted from your device, as a security measure. That means you may only have one chance to print so ensure your printer is up to date and problem-free before printing.
2. Device Security
The security of a paper wallet comes in two parts. Firstly, the security required when generating the keys. Secondly, the security of the paper after it is printed.
During the generation of your keys, you should ensure the device you use has up-to-date antivirus software and your device should be scanned beforehand. All devices, including tablets and phones, can be infected with viruses or hacked regardless of how safe you think it is. If you have unknowingly installed a virus or malware on your device, this program can share your data and your activity with the hacker. In turn, they’ll be able to gain access to your keys at the same time you do.
As a bonus security measure, turn off the wireless connection to your device, use your phone data as a hotspot if necessary, and make sure Bluetooth is also off.
A wireless internet connection and Bluetooth are both ways hackers can gain access to your computer and phone. Put your phone or computer in airplane mode and disable wireless connections before obtaining your keys.
While this may seem over the top, it’s far better to be safe than sorry for the sake of a few easy steps.
After you have generated and printed your keys, clear your caches, empty the recycle bin, delete temporary files, and check to make sure no digital backup was created at the same time. You need to leave no trace on your device.
3. Physical Storage
Let’s now look at the security of your wallet once you have completed these steps. You must keep your paper wallet somewhere uber safe. The location should also be fireproof, waterproof, and is protected against natural decay.
As mentioned previously, many people like to keep theirs in a bank safety deposit box.
It may seem like a hassle to visit the bank anytime you need to access your wallet but there is no safer place to store it. Regardless of where you put it in your home, it will still never be as safe as at the bank.
Additionally, people often fare better when they leave their crypto in the long term. Having your wallet relatively far away can prevent you from panic selling and regretting it later.
Understanding Paper Wallets FAQs
Is a Paper Wallet the Same As a Cold Wallet?
Yes, a paper wallet can also be classed as a cold wallet since it is completely offline. However, since cold wallets generally refer to wallets kept on USB sticks and similar devices, a paper wallet is still separate from a cold wallet.
How Do You Obtain a Paper Wallet?
You can use a paper wallet creating app to get your keys or to generate a QR code or other scannable code. You can also write your keys down by hand.
Is a Paper Wallet the Best Option?
The type of wallet(s) you choose will depend entirely on your needs. Some people prefer hot wallets for their instant access and convenience while others prefer cold or paper wallets for their added security.
However, since you can have multiple wallets, you can use a wallet from each type and decide for yourself which you prefer.
Important Points to Takeaway
- A paper wallet is exactly as it sounds. It’s a piece of paper containing your public and private keys for your crypto address
- Paper wallets are a secure option because they are offline and therefore impossible for online hackers to gain access to
- If you have a paper wallet, its security is paramount. Most people like to keep theirs stored in a bank safety deposit box
- You can have multiple wallets so you can have a hot wallet, cold wallet, and paper wallet, and see which you like best
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