A paper wallet is a piece of paper with a cryptocurrency’s private and public keys printed out.
This technique of storing cryptocurrency was among the first. It was widely adopted by crypto exchanges that even had an option for clients to print out their private keys as an offline method of storing valuable digital assets.
In some instances, a paper wallet might have a scannable QR created by default by the enabling application.
Is Paper Wallet A Cold Wallet?
A cold wallet is a type of cryptocurrency wallet that is not connected to the internet. This disconnection means a user can securely store valuable digital assets with the assurance that a hacker or a third-party unauthorized agent cannot gain access and steal their assets.
Because a paper wallet is non-custodial and cannot be hacked since it is offline and on paper, it is considered a cold wallet and a cheaper alternative for manually safeguarding cryptocurrencies.
Therefore, like other cold storage options, a paper wallet can only store substantial crypto amounts, provided the user safely keeps the paper wallet on which the crucial private key is printed.
Are Paper Crypto Wallets Safe?
Security in crypto is an evolving subject. In the early days, malicious agents took advantage of unfamiliarity among adopting users to steal assets. Further, the crypto scene wasn’t well-developed.
However, times have changed, and a paper crypto wallet remains a safe option. Notably, printing out the private and public keys on paper makes it impossible for a third party to hack and decrypt private keys.
Paper is a fragile material. It can catch fire or be scorched, in some instances destroying private keys and making it impossible for users to retrieve coins. Nonetheless, it should be noted that the safety of the paper wallet is also dependent on external factors, including the quality of ink and paper used and how well the crypto holder secures the paper wallet.
How Do You Send Money With A Paper Wallet?
A paper wallet has private and public keys printed on it. In some instances, a QR code can be printed on paper.
When transferring money in cryptocurrency, all a user needs is the public key. This can be inputted manually or scanned, allowing funds to be sent quickly.
Because of this provision, a paper wallet can be used to send money to users quickly from an offline source in a secure manner.
Are Paper Wallets Obsolete?
Paper wallets were widely used in the old days of crypto to store large sums of coins offline. However, paper wallets have been on a decline over the past few years as new, secure, digital, and convenient cold storage facilities are launched. While there are high risks, such as misreading private keys or the printed paper getting destroyed, it remains an option for storing digital assets.