Paper Wallet

( 10th September 2019 )

You can print out a QR code for both a public and private key. This allows you to both send and receive digital currency using a paper wallet. With this option, you can completely avoid storing digital data about your currency by using a paper wallet. A paper wallet is simply a public and private key printed together. It is an offline wallet, and is usually regarded as a type of “cold storage” (extra-secure storage that does not make contact with the hackable internet), although it has some important differences that make its presence in that category debatable. As the name suggests, paper wallets are usually made out of paper, although technically they could also be made of plastic or any other substance on which information can be durably printed. What is printed on the paper wallet are the private and public keys, usually in QR form, with the latter also serving as the address. You could just copy and paste the keys onto a text document and print that out (erasing the copy on the computer afterwards). Or you could use one of the free web services that generate the printable wallet for you. The key generation is usually done in your browser, so they are never transmitted on the internet. To be safe, you should clear your browser after printing. And never store an image of the paper wallet on your computer or phone. Some paper wallet services have a nifty design that you can cut, fold and seal, making them a lightweight and relatively secure form of storing bitcoin offline. You send your bitcoin to the public address displayed on the wallet, and then store it in a secure place. What makes paper wallets secure is that they are totally offline (generally known as “cold storage”). They are not within the reach of hackers, and your bitcoin are never trusted to a third party. As long as the paper wallet is secure, your holdings are secure. But, therein lies the relative lack of security. Someone could find your hiding place, take your printout, spend all the bitcoin associated with those keys, and return the paper, so you would never know. A more secure version would involve folding the paper so that the private key is hidden from sight, taping the fold with a seal that can’t be broken and replaced (just search for “tamper evident seals,” there are many different providers and models), and making sure that the private key cannot be seen even if the folded paper is held up to the light.

Fig 2.13: ​ Paper Wallet

Desktop Wallet: The most common type of wallet. Typically, an app that connects directly to a coin’s client. A desktop wallet is an application that is installed directly on your computer. There are many such non-custodial programs, for example, Electrum and BitGo. Choose this type of program according to the cryptocurrency you need to store, and the operating system. You can use this wallet only when you are connected to the Internet. But since the keys are stored on the computer itself, there is a possibility of theft if the fraudster takes physical possession of your computer.

Fig 2.14: ​Exodus - A Desktop Wallet