Paper Wallet Definition
A paper wallet is a physical document that securely stores the private and public keys needed to receive or spend certain cryptocurrency tokens. The creation of the paper wallet involves printing or physically writing down the keys, and it is considered one of the safest ways to store cryptocurrency offline, referred to as cold storage.
Paper Wallet Key Points
- A paper wallet is a physical copy of both your public and private keys for a cryptocurrency.
- This method involves storing crypto in an offline environment, which is considered the safest way to hold cryptocurrencies, protecting them from online hacks.
- The keys are often printed in the form of a QR code, which can be scanned for easy transactions.
- However, paper wallets are not recommended for beginners as they can be complex to set up and require utmost care for safekeeping and privacy.
What is a Paper Wallet?
A paper wallet is an offline mechanism for storing cryptocurrencies. The process involves generating a new public-private key pair using certain software, then printing them onto a piece of paper, hence the name. This key pair allows users to both receive and spend cryptocurrency.
Why Use a Paper Wallet?
People use paper wallets as a form of cold storage; an offline method of securing cryptocurrency. This technique greatly reduces the risk of theft from online hackers. Paper wallets are immune from computer crashes, malware, and other risks associated with having your cryptocurrencies connected to the internet.
When Should a Paper Wallet be Used?
Paper wallets should be used when long-term, secure storage of cryptocurrencies is needed. They are very useful for people holding large amounts of cryptocurrency, particularly if they do not intend to trade frequently.
Where Can a Paper Wallet be Stored?
Paper wallets should be stored in a secure location to prevent physical theft. This could be a lockable drawer, a safe, or a secure deposit box. Some even choose to laminate the paper to protect it from physical damage such as water or moisture.
How to Make a Paper Wallet?
To create a paper wallet, one needs to generate a new pair of public-private keys using an online service. Once generated, these keys should be printed onto a piece of paper. For added security, it’s also recommended to print multiple copies and store them in different safe locations.
