With the growing popularity of cryptocurrencies, there are more and more cases of fraud and hacking. Now you can easily face fraudulent ICO, side exchanges, fake wallets, Twitter scammers, etc. The risk of losing crypto coins is greater than ever, and it is almost impossible to track scammers.
It is very important to keep your cryptocurrency in a safe place. Although there are plentiful options for storing coins, many experts claim that none of them is as secure as a paper wallet.
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How to Keep Your Crypto Safe
Crypto wallet is a digital wallet that you can use to store, receive and send cryptocurrencies by saving your private and public keys. There are many types of wallets like hot and cold wallets, hardware, software (web, desktop, and mobile), and paper wallets.
Let’s go through them:
Hot Storage vs Cold Storage
Hot storage refers to wallets designed for easy access and preferred by users who regularly spend and transfer crypto funds. A hot wallet is any wallet that uses the Internet. These wallets are pretty simple to set up, and your digital money is more accessible, which makes them more attractive to users.
Cold storage consists of wallets designed for long-term storage, usually a large amount of crypto that will not be regularly accessed. Cold wallets are not connected to the Internet, as they use an offline physical media or device for storing funds. This for sure prevents hacking attempts. To sum up, this storing method is considered to be more secure than the hot one, and more convenient for long-term investors and HODLers.
Hardware vs Paper Wallets
Hardware wallets are electronic devices where you can store your cryptocurrency. There are several forms of hardware wallets, but the most popular is the form of a USB stick.
Click here and read about hardware wallets on Changelly.
Examine some well-known hardware wallets:
It is not a secret that being cold storage, a hardware wallet is considered to be one of the most protected ways to store funds. At the moment, most hardware wallets allow you to set a PIN code to protect your device and a recovery phrase that can be used if your wallet is lost.
Despite the high level of protection against network attacks, such wallets still have risks if the implementation of internal software is not performed properly. Furthermore, the interface of a hardware wallet might seem less convenient to use, and funds are harder to access.
Paper wallet is an offline cold storage method in the form of a printed QR code of both private and public keys on a piece of paper. These codes you can scan for all transactions. Without a doubt, you can already conclude that this is the safest way to store digital funds and you are definitely right. You might worry about neither hacking attempts nor internal software.
So, let’s speak about how to make Bitcoin and Ethereum paper wallets step-by-step.
How to Set Up a Paper Wallet for Bitcoin (BTC)
Step 1. Choose a paper wallet generator. There is a wide array of different services, take a look at the most famous ones: Bitaddress, Walletgenerator, and Bitcoinpaperwallet.
In the next steps we are going to explain how to make a paper wallet on the example of Bitaddress.
Step 2. Prepare your computer.
Since paper wallets are created on a PC, there is always a risk that a hacker or malware will try to steal your keys. Therefore, we recommend you to create a wallet on a computer that you trust, and it should not be a public or someone else’s machine. Even with a trusted computer, you need to make sure that there are no viruses or malware. You need to update the antivirus program in time and check your computer for security problems. It is very important to remind not to use public WI-FI because it is a piece of cake for hackers to get information from networks.
For additional security, you can make sure that your operating system is updated.
Step 3. Download an offline generator.
To provide higher security, paper wallet generators offer you to download a .zip file with a website copy. Thereby, you can do further steps offline.
Step 4. Once downloaded, check a .zip file and then extract it. Make sure you have disconnected your PC and printer from the Internet, this must provide a secure offline environment for generating keys.
Step 5. After you have extracted a .zip, open a Bitaddress.org file
Then click bitaddress.org.html
Move your mouse around to add some randomness for generating bitcoin address or simply type some random characters into the textbox.
You see two QR codes. One with a green Share label and an address below with a public key, so you can contribute funds to this address. The second QR code with the red Secret label is your private key.
Bitaddress.org also suggests creating a paper wallet, a bulk wallet, a brain wallet, a vanity wallet, or a split wallet.
You can make as many wallets as you prefer.
Step 6. After you have received a page for printing with basic instructions, print and save it.
Step 7. After the wallet is generated and saved, it is desirable to delete the files of the wallet creation program and the Internet search history, clear your cache, erase the items in the trash, and restart your computer before connecting to the Internet.
Step 8. Send cryptocurrency to each wallet. You can send any amount you want, it depends on your purpose. If you are going to send a big amount, try to do it with a few satoshis before, to check and make sure everything works fine.
Step 9. Think about wallet protection. First of all you must make sure that no one has unauthorized access to your keys. Keep your wallet in a safe place and fold it in a way that the private key is not visible.
Secondly, paper wallets also have risks of fire, moisture and water ingress, as well as natural decomposition of paper. The easiest way to prevent these risks is to create multiple copies and store them in different secure locations.
How to Set Up a Paper Wallet for Ethereum (ETH)
Step 1. Choose a paper wallet generator. You can use some of these services: Walletgenerator or Myethwallet.
In the next steps we are going to explain how to make a paper wallet with Walletgenerator. We show how to make a paper wallet the most secure way.
Step 2. Go to Github.com and insert a link walletgenerator.net in the search string.
Step 3. Click on the appeared file and scroll down
In the ‘readme’ window follow the link and download a .zip file.
Step 4. Disconnect the network on your computer and printer. Further, extract the .zip and click on the index.html file.
Step 5. Move your mouse around to add some randomness for generating ethereum addresses or simply type some random characters into the textbox.
As well as making a Bitcoin paper wallet, You see two QR codes. One with a green Share label and an address below with a public key, so you can contribute funds to this address. The second QR code with the red Secret label is your private key.
Walletgenerator.net also suggests creating a paper wallet, a bulk wallet, or a brain wallet.
Step 6. Print and save your code.
Step 7. Before connecting the Internet, make sure you have emptied your trash, cleaned browser history and deleted all files. Read steps 8 and 9 in the Bitcoin part about precautionary measures.
Are Paper Wallets Safe
As we have already noticed, paper wallets are deservedly considered to be the safest way to store currency. However, it is very crucial to point out existing risks.
- Malware risks. Despite the fact that a paper wallet is supposed to be offline storage, it still has chances to be hacked online. Some malware might read your keys in a creating process.
- Keylogger risks. Scammers can read your private key when you start entering it into your computer to withdraw funds.
- Printing risks. Printing your paper wallet can bring other risks. If you use a printer connected to Wi-Fi, your computer will send a file from your device to the printer in an unencrypted format.
- WI-FI risks. By using a public Wi-Fi you are putting your funds at danger of being stolen. In General, all networks are hazardous, but you should especially stay away from public networks.
- Physical risks. In the case of an offline wallet, the probability of theft or loss is as high as to damage.
How to make your paper wallet safe?
- Generate private and public keys strictly offline
- Disconnect the computer and printer from the network and use a USB cable to connect them
- Don’t use public WI-FI, or any network you don’t trust
- It is not necessary to tell everybody about storing a large amount of crypto on a small piece of paper. There is also no need to say where… Hope you’ve got it
- Put your paper wallet in a safe place, where you or anybody/anything else can’t damage it
Following these simple rules makes your paper wallet 100% safe.
Final Thoughts
Taking everything into consideration, a paper wallet is a good alternative to many other ways of storing cryptocurrency. It is free and quite accessible. There are a large number of different user-friendly paper wallets generators, so you can undoubtedly find the best for you. In this article, we have proved that despite all possible risks, this way of crypto storing can be fairly considered the safest. No one will guarantee you complete security if you don’t take care of it yourself.
