Cryptocurrency wallets usually consist of two keys. A public key represents user's wallet address on which other users send Bitcoins. A private key is the one that allows users to send their Bitcoins to other people on the network. However, in order to make the Bitcoin transaction possible, both sender's private key and recipient's public key have to exist.
The most important thing to do is to keep your private key safe because if other people obtain it, they can withdraw all your funds from the wallet. So, whether you choose to store your cryptocurrency in software wallet on your PC or an online wallet, you must know that you are still vulnerable to hacking and malware that could access your address. That is exactly why many BTC holders opt for paper wallets that protect them from those attacks.
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What is a Bitcoin paper wallet?
Paper wallets are simple physical documents that hold copies of both your public and private key. They frequently include QR codes as well, so the users can scan them and add both keys into a software wallet when making a transaction. The huge advantage of paper wallets is that public and private keys are not held anywhere on the network, which makes them quite secure from hacker attacks or some hard-drive problems. The disadvantage is that they are basically pieces of paper with ink on it, which makes them quite fragile, because papers can be lost, torn or burned, and ink can degrade over time. So, it is essential to keep them in a safe place and always know where they are.
Creating a paper wallet
There are some good platforms where you can create your paper wallet, such as BitAddress (for making a Bitcoin wallet) and LiteAddress (for making a Litecoin wallet). Once you choose which cryptocurrency wallet you wish to make, you should just open the link in your browser which will lead you directly to the first step of creating a paper wallet.
Then, the BitAddress will ask you to type characters randomly into the form, which you can also do by simply moving your mouse cursor around. Once it is done, you will receive your private and public keys as well as the QR codes. The next step is to click on the "paper wallet" tab and decide how much addresses will be generated. The Bitcoin artwork can be easily removed just by clicking the "hide art" button. Next, to create new wallets, you should click the button "generated". After the wallets are created, press the "print" button which will finally enable you to make a hard copy of it.
The browser will soon tell you to select the printer you wish to use. If you're using Google Chrome, the additional step is to save that page as a PDF file. The last step is to make a note of the addresses or just scan QR codes with a Bitcoin app. After everything is done correctly, you will be able to deposit some funds.
Bitcoinpaperwallet.com is considered to be one of the best types of paper wallets that can be found online. It is mainly because the website gives the option of having a tamper-resistant paper wallet, which is quite important when it comes to keeping it safe for a longer time. You can also order the holographic labels which guarantee that your wallet isn't tampered with. Bitcoinpaperwallet site offers a live-boot Ubuntu system compact disc with paper wallet software that is already installed.
Using the paper wallet
Once you have finished creating your paper wallet, it is time to consider the best way to use it.
Printing the Bitcoin paper wallet
When you open the Bitaddress.org page and go to the paper wallet tab, when it comes to printing, it is best to set up the high-quality printing setting.
Downloading the Android App
It is advised to all new crypto users to download the Android app on Blockchain.info page. When you download it, you will be asked to join it to your existing paper wallet or to create a new one. It's important to follow the instructions on the screen if you wish to do this in a simple and quick way.
Scanning the addresses
As we already mentioned, Bitcoin addresses contain public and private keys as two major parts. So, you should now enter the public part of the address into the Android application. By doing so, you're actually allowing the application to access the balance and all the transactions of your address, but you still can't spend your funds without scanning the private part of the address.
The next step is to open the Android application. Go to the top menu bar and click the "address book" option. When you click the menu button once more, click on "scan watch only addresses". It finally allows you to scan QR codes on your paper wallet with the option "load and verify."
Receiving and sending coins
After the whole process is successfully completed, Android app's "watch only" tag will allow you to see the addresses from your paper wallet. You are also allowed to receive funds and take a look at your transactions. Before engaging in serious spending, it's advised to make a short test by spending just a small amount of coins. You will find the "send" arrow in the upper right corner, and after that, you should just click the menu tab and choose the option "custom send".
Keeping large amounts of funds in your wallet is always quite risky, so you should take some serious caution steps. It is essential that you are the only person who witnesses creating your paper wallet. BitAddress platform offers the encryption of private keys with a BIP38 algorithm. This tech gives you with the two-factor authentication of your paper wallet. Whenever you wish to decrypt the private key, you will have to use BitAddress site.