One address and one Private Key
A Paper wallet is a popular way to store bitcoin. In this guide we are using bitcoin as an example, but the concept of a Paper Wallet can be adapted or used for other cryptocurrencies.
Firstly, we have the ‘bitcoin address’. It is very similar to a bank account number. You can show the address to others if you want to receive bitcoin, but they can never use the address to spend your bitcoin.
The other part is called ‘Private Key’. The private key allows you to send bitcoin to other bitcoin wallets. Important: If someone else gains access to your Private Key, they can easily steal your bitcoin.
Then, what is a Paper Wallet?
A Paper Wallet is a document that collects the most important information you need concerning your Bitcoin wallet in one place.
A Paper Wallet, treated with care, is considered a safe way to keep important bitcoin information. Why is it so safe? Because it is on a physical paper, not online. No one can hack into that.
What more does a Paper Wallet contain?
A Paper Wallet usually contains a copy of the bitcoin address and the private keys that you can use to spend your bitcoin. It can also contain QR-codes that are easy to scan. This provides a simple way of copying the address and keys to an application, such as a wallet in your phone.
What are the advantages?
Your keys are not stored online, which decreases the risk to have your bitcoin stolen by someone, like a hacker.
Other advantages are that you are not in the risk zone of hardware crashes. If you are saving the keys in a file on your computer and your computer crashes, it is difficult to get your keys back. This is a problem you will not face if you store your keys on a Paper Wallet.
Are there any disadvantages?
The main disadvantage of a Paper Wallet is that the printed ink can disappear and the paper itself is a fragile material. It is a good idea to laminate the paper if you want it to last long.
I received a Paper Wallet from you, what should I do with it?
We have written a guide specifically for this.