For many traders, the question of safekeeping cryptocurrency is no less important than the question of earning on the purchase of top coins. After all, what’s the difference, how much profit you got from playing on the course, if you are not sure that your assets are kept in a safe place? Mobile and online wallets can be hacked and desktop and hardware are subject to the influence of computer viruses. Fortunately, there is also a paper wallet for cryptocurrencies, which many experts call the most reliable in terms of long-term storage of coins. However, is it really? Let’s try to figure it out.
What is a paper wallet for cryptocurrency?
Like any other wallet of this type, a paper wallet for storing cryptocurrency contains two private and public access keys. The first is a blockchain address and is needed to receive funds from other users. The second allows you to transfer coins to other people.
It is the combination of these two keys that makes it possible to make transactions in the blockchain. Having lost the keys, you lose access to your cryptocurrency assets. If this data gets to another person, he can use it to access your funds.
Unlike mobile, desktop and online wallets that store data electronically a paper wallet is the physical carrier of access keys.
How to create a paper cryptographic?
You need to obtain the appropriate access keys in order to create a paper crypto wallet, which can then be imported into an online wallet.
As an example, consider the process of creating a paper wallet using the https //walletgenerator.net/ service – it is very simple and easy to use.
The wallet created with the help of the Wallet Generator is suitable for storing 124 cryptocurrencies – you’ll see the entire current list on the right side of the site. Here are almost all popular cryptocurrencies with the exception of the ether.
If the list on the WalletGenerator website does not contain the cryptocurrency you need, the procedure is the same. You need to go to the official crypto wallet website to store the currency of interest to you, find the help section and select the item that contains information about downloading the purse offline.
Please note that some programs generate only combinations of characters. There will be no QR codes in the created wallet. Experts claim that such wallets are less reliable than those that contain both character combinations and QR codes.
Moreover, the developers of the crypto wallet themselves are advised to use QR codes for greater safety of savings. Therefore, in this article we look at modern integrator sites that create codes for scanning.
How to create a paper cryptographic?
When a paper wallet is created, you need to turn it into a cold cryptocurrency repository. You will have to install QR codes on your smartphone, enter the mobile application for storing cryptocurrency (for example, Jaxx) and scan the public wallet address (on the left), to do this.
Now you need to import the created paper wallet into the online crypto wallet where you store the coins. The process of integrating wallets is called sweeping and takes a little time.
Now your coins from the online wallet will be on a paper crypto wallet. You can simply leave them here for storage or transfer funds to another wallet.
You need to follow the instructions above to return to the main wallet, but in the “Imput my privat key” field enter the corresponding key of your online wallet (it is also desirable to store it in a separate file on your computer or in a recorded form).
If you used WalletGenerator, follow the given instructions. If you chose BitAdress or MyEtherWallet, in which the BIP38 encryption system is embedded, you will have to perform additional steps
Generators using BIP38 provide dual access protection, therefore, are considered more reliable than conventional ones. You print access keys in encrypted form. You need to re-use the site generator to decrypt them.
That is, even if the printout falls into the wrong hands, the attacker will not be able to connect your paper cryptographic file with his online repository simply by scanning the printed codes.
Paper wallet for cryptocurrency: the pros and cons
If you used generators that work without QR codes, for sweeping you just need to go to your online wallet and change the key in your account settings. You need to enter the public key, and to send funds – private to receive a transfer from another user.
Security of desktop, mobile and online wallets is reduced due to the fact that at any time you can become a victim of a computer virus or hacking. If your access keys fall into the wrong hands, consider that you have lost all your savings.
A plain sheet of paper can not be called an absolutely safe means for storing important information. It can burn, it can be stolen or you can just lose it. If you have not disconnected from the Internet, when you created such a wallet or printed codes on a printer connected to Wi Fi, it is possible that your data has already entered the network.
In addition, using paper wallets for regular operations with cryptocurrency is rather inconvenient. You will have to scan codes each time or enter access keys to complete a transaction. In this regard, desktop and online wallets are more practical.
Another disadvantage of paper wallets is related to their unusualness for most users. Many people have confusion with access keys and QR codes, because of which they incorrectly execute transactions.
For example, they make a transfer to another crypto wallet by scanning the public key – quite often the funds are debited from the account, but not transferred to the balance of the recipient, “getting lost” somewhere along the way.
There are also frequent cases when the user has saved the keys in encrypted form (using BIP38), but lost access to the site where they can be decrypted. If money is already stored on a paper wallet and the keys can not be decrypted you simply do not have access to your funds.
Remember, when you import a paper wallet key into an online wallet, all the risks associated with placing confidential data on the network become relevant again.
However, if you often make transfers between crypto wallets or regularly withdraw funds from cryptocurrency exchanges, it is much more convenient to use a reliable online wallet.