A bitcoin paper wallet is a cryptocurrency address that helps individuals store bitcoin offline.
Fiat currency has a physical representation: the dollar or currency note. On the other hand, Bitcoin has no physical representation; thus, it is stored using an encrypted ledger known as Blockchain.
The blockchain system is responsible for certifying bitcoin's transactions. A paper wallet is also based on the blockchain system.
A wallet address is like a bank account number. The wallet address is a unique key made up of alphanumeric characters used for sending and receiving bitcoin or any other cryptocurrency.
There are two forms of representing a cryptocurrency wallet: a long string of case-sensitive alphanumeric characters, e.g., 1mgi5nhsxu3ljncdar69cebpFFFFfffssmwcm,
or a QR code, as shown in the image below.
There are three wallet types or systems for storing, sending, and receiving cryptocurrency, namely:
A paper wallet is an offline or cold storage method for storing cryptocurrency. It is one of the safest types of wallets for storing crypto for the long term.
A paper wallet is primarily printed on a piece of paper that contains keys and QR codes.
Some paper wallets are completely offline and cannot be hacked. A wallet's public key is used to receive cryptocurrency and can be shared around, while the private key is used to access the crypto assets is printed on paper.
A paper wallet has several pros or advantages. Some of the advantages of a Bitcoin Paper Wallet are listed below:
The paper wallet also has many cons or disadvantages associated with it; some of the disadvantages of a paper wallet are listed below:
Below are procedures for creating a paper wallet to store cryptocurrency:
3.Click print wallet.
4. Choose how many copies you would like to print out.
5. Encrypt the wallet with a BIP38 password (optional)
6. Print the paper wallet.
The major demerit of a paper wallet is user error. If a printer uses low-quality ink, it may fade or clear with time, making the paper wallet useless. There are also cases of misreading the keys, leading to the loss of the crypto assets.
In summary, a paper wallet has its benefits, but you are advised to weigh and balance the risks against the acclaimed benefits.