A paper wallet is just a piece of paper with keys. The paper contains keys and QR codes that are used to facilitate cryptocurrency transactions. Generally, it has a single private key and bitcoin address, generated by a website.
Is Paper Wallet An Unsafe Method Of Storing Bitcoin?
You can also seed phrases, where the users write down 12 to 24 words that are randomly generated by their bitcoin wallet. Is it the safest method to store bitcoin? Or unsafe? Are you eager to know the answer? Read on this article till the end to get answered.
What is Paper Wallet? How does it work?
Paper wallets are an offline cold storage method of saving cryptocurrency. You can print out your private or public keys on a piece of paper. Then you can store this paper and save it in a secure place.
You can scan those keys stored in the paper in the form of QR codes for your future transactions. Generally, they are generated by using a program that generates a public or private key. Thus generated key will be unique for each one of you.
Is it safe to store bitcoin?
It is the safest way to store any cryptocurrency. Because it gives complete control to the user. It is considered as an extremely secure way to keep your bitcoins or any other crypto coins safe from cyber-attacks, and hackings. In the paper wallets, private keys are stored offline instead of bitcoins.
Hardware wallets are also secure. But they are highly vulnerable to hackings, and malware. Even though paper wallets are secure to store your crypto coins, they are not highly recommended to beginners as they have many risk factors.
Risk factors for using paper wallets
Below given are some of the risk factors for using paper wallets. Let’s check it out.
- Don’t be a target
Bragging about your crypto investments, even though it is very huge doesn’t do good for you. This makes yourself a target and it doesn’t matter if the keys are offline, people will try to steal them.
- Easily damaged
The wallet is simply a piece of paper and it easily gets damaged. It will also get worn out over time. So the intelligent idea is to make multiple backups. This helps you to save your private keys, even though the other wallet is damaged.
- Anyone can easily steal it
Paper wallets are not vulnerable to cyber-attacks and malware as it is not connected to the internet and keys are stored offline. But its only a paper and anyone can easily read out the key written in it. So it is easy to steal your coins.
- Forgetting the location of the paper stored
You can have memory loss and even forget the location of the paper that you stored securely. This may cause the permanent loss of your keys.
Cold storage or paper wallets are safer than hardware wallets as it is not connected to the internet. But this may become an unsafe method of storing your coins while considering certain risk factors as mentioned above. So take an intelligent decision as per your preferences of storage.