With the increasing popularity of Bitcoins, more and more people are buying Bitcoin to make some money. Though some of the people buy Bitcoin for short term purpose, most of the people buy it for a long term investment perspective.
If you are keeping Bitcoin as a long term investment, then storing them in Cold Storage wallets is the best way. Cold storage wallets are the ones where you own the Private Key(Mostly Offline Wallets) thus they are extremely safe to store the cryptocurrencies.
Since there are various type of Cold Storage Wallets like Hardware Wallet, Desktop Wallet etc, Today’s guide is about How to make a Paper Wallet to keep our BTC safe. Earlier we had covered Android Bitcoin Wallets, so don’t forget to have a look at it.
Here I will try to give you the complete knowledge about Bitcoin Paper wallet and I’m assuming that you already have Bitcoin in your Online Wallet like Coinbase, Xapo etc.
- 1 What is a Bitcoin Paper Wallet
- 1.1 Requirements for Bitcoin Paper Wallet
- 1.2 How To Make A Bitcoin Paper Wallet
- 1.3 BIP38 Encryption in Bitcoin Paper Wallet
- 1.4 What will happen if you do not use BIP38 Encryption?
- 1.5 How to Spend BTC from a BIP38 Encrypted Paper Wallet?
- 1.6 How to Use your Paper Wallet
- 1.7 How To Spend Bitcoin from Paper Wallet
- 1.8 Benefits of Bitcoin Paper Wallet
- 1.9 Disadvantages of a Paper Wallet:
What is a Bitcoin Paper Wallet
Before digging deep on How to make a Bitcoin Paper Wallet, let’s have a quick intro about a few basic things related to Paper Wallet.
A Bitcoin Wallet consists of two ‘keys’. One is a ‘Public key‘ which is also known as Bitcoin Address and the other one is ‘Private Key‘ aka the Adress Pin which lets you send Bitcoins to other address.
Hence, If someone has both the keys then your Bitcoins are in danger of getting stolen.
The Online Bitcoin wallet where your Bitcoins are generally stored has both your keys, hence in case of a Hack or Theft you might lose your Bitcoins. This happened with Mt. Gox exchange was hacked and Bitcoin worth millions vanished into thin air. So, It’s always recommended to store you Bitcoin in Cold Wallets where you own the Private keys and the chances of theft is next to impossible.
A paper wallet is a piece of paper which has both your Public as well as Private Keys. The keys are often stored in QR codes format, so as to quickly scan through a software wallet inorder to receive Bitcoins.
With Public Bitcoin Key(Address) you can accept more fund into your paper wallet and Private key will allow you to send Bitcoins.
Since Both Public as well as Private keys can be seen with naked eyes, this paper document has to be handled with extreme care and security or else you might easily end up losing your golden treasure.
I hope you must have understood the basics of Paper Wallet now. If you are interested you can also have a look at How Bitcoin Works.
Before you start making your personal Bitcoin wallet, let’s see what all we need for this.
Requirements for Bitcoin Paper Wallet
You just require only a few basic things, these are:
- Computer with Internet Acess
- Printer(Colored Printer would be better)
- Smartphone with QR Reader
- BTC in Online Bitcoin Wallet
- Make sure the Room is empty
Once above mentioned basic requirements are fulfilled, its time for a DIY tutorial of How to create a BTC Paper Wallet for free.
How To Make A Bitcoin Paper Wallet
Below are the Steps to Create a Secure Bitcoin Paper Wallet:
- Visit https://www.bitaddress.org/ through your Browser.
- Press(Ctrl + S) to save the Web page to your PC.
- Disconnect your Internet Connection.
- Now Locate and Open that Downloaded Web Page.
- Hover on the Page, Randomness Percentage will increase.
- Once, Randomness reaches 100%, you will see a Screen like below.
- Now Click on Paper Wallet.
- You will see 3 Bitcoin Address with their Private keys.
- If you want only 1 Bitcoin Adress & Private key, then change Addresses to 1 and Press Generate.
- You can also Click on BIP38 Encryption box & Write a Paraphrase for more security.
- Once Done, Connect your Printer and Click on Print.
- That’s it! Just cut the important part with Scissors and You will get yourself a freshly made Bitcoin Paper Wallet.
CageTip: Remember to be Offline while doing all the above steps or else you might compromise the security of Bitcoins.
Now you must be wondering to know a bit about BIP38 encryption right?
BIP38 Encryption in Bitcoin Paper Wallet
BIP38 is an extra layer of security for your Paper wallet.
As you know Public Key and Private key both are visible to everyone, you might loose your money if someone get hands on your paper wallet.
Thus, to make your paper wallet a bit more safer, you can use BIP38 encryption option where you can encrypt your Private keys. In simple words, you are making a password for your Private key.
So Even if you lose your Paper wallet, no one else could steal your Bitcoins unless they know the Paraphrase.
Steps to make Paper Wallet BIP38 Encrypted:
- Click the box to enable BIP38 encryption
- Now Enter a passphrase, and click Generate.
Now you have a Bitcoin paper wallet with BIP38 Encryption.
What will happen if you do not use BIP38 Encryption?
First of all, If you already have a Paper wallet without BIP38 encryption, their is no need to worry about. Just keep that Paper wallet safe and secure from other people.
BIP38 encryption is just another layer of security to protect your money. If incase your wallets Public Key and Private Key is visible to someone, they can use your Bitcoins.
So, Its always good to have an extra protection.
How to Spend BTC from a BIP38 Encrypted Paper Wallet?
When you spend Bitcoins from your encrypted paper wallet, the software wallet will prompt you to enter the Paraphrase to unlock the Private Key. Once you enter the Paraphrase then you can use it.
But if by any chance, you forget the paraphrase to unlock your Private key, then you won’t be able to use your Bitcoins again. So make sure to remember the paraphrase if you don’t want to lose your treasure.
Here is a quick video, so that you can have some more information about Paper Wallets.
How to Use your Paper Wallet
Once your Paper Wallet is ready, it’s time to add Bitcoins to it.
- Scan the QR Code(On the right side) using a software Wallet like Copay, Blockchain.info etc.
- Now send the desired amount of BTC to that wallet.
- Once BTC are sent, you will receive a notification on Software Wallet
- To remember the amount of BTC, You can also write the amount of BTC on the Mid Bottom of the Paper wallet.
How To Spend Bitcoin from Paper Wallet
Sending Bitcoin from Paper Wallet to other Address is quite simple.
- Scan the Bitcoin Address on Paper Waller(Left Side QR) with your Online Wallet
- Now Enter or Scan the Private Key(On the Right side of Paper Wallet) using the Web Cam
- Enter the Bitcoin Address where you want to send the Bitcoins
- That’s it! Bitcoin will now be sent to other address.
Benefits of Bitcoin Paper Wallet
Now, let’s talk about some of the benefits of creating a Paper Wallet:
- Safe to Store your Bitcoins
- Cheapest way of Cold Storage
- Can be used as Gift Cards
- Double Level of Security
- Doesn’t take much time to create one
Disadvantages of a Paper Wallet:
- If you forget the Paraphrase, then you would lose your BTC
- Incase of Mishandling like tearing or getting wet, it would be difficult to get bitcoins back
- Paper degrades overtime
- Private key can accidentally be exposed. This actually happened with someone who showed a paper wallet in a live conference and his Bitcoins were gone almost instantly.
That was all for Today! I hope you must have understood the whole guide about Bitcoin Paper wallet and How to make one for yourself.
If you have any questions about the Paper wallet, then feel free to comment below and I will be more than happy to reply it.
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