If you have ever Googled the word Bitcoin you have probably seen images like these:
These are examples of what’s called paper wallets. A wallet in the crypto-currency sense is a combination of a public payment address and a private key. Wallets can be placed online, for example, on exchanges such as Crypsy or Coinbase or CEX.IO, placed on your computer (Bitcoin wallets are available here, Litecoin wallet is available here), or, as in this case, printed on paper.
Two key components of a paper wallet (or any other wallet):
Public Paying Address: This is where anyone who sends you a coin will apply for payment, and is often called your Bitcoin or Litecoin address. These addresses are NOT a secret, and you should not have to worry about sharing them. A Bitcoin address is a 27-34 alphanumeric string starting with 1 or 3, and looks like 135V3Bs1rtz7JcuCMY331VuNH2wU24TQEJ. The address is often displayed as a QR code. Litecoin addresses look very similar, are also often displayed as QR codes, are 33 characters long and start with L.
Private Key: A private key is literally the key to your coin, if someone wants it, they can withdraw the funds currently in their wallet, as well as any funds that can be deposited in that wallet in the future. PROTECT YOUR PRIVATE KEYS!!! For paper wallets, the key is usually in the Import Purse Format (WIF). WIF keys are short enough and consist of 51 characters, mainly to make it easier to enter them into electronic wallets when transferring, also known as “sweeping”, funds from paper to electronic wallets. These keys can also be shown as QR codes. Important note: personal keys of paper wallets should NEVER be saved on your computer’s hard drive, online cloud service or email.
Therefore, understanding this should make it clear that a paper wallet is actually no more than two paired lines of characters, address and private key.
As an example, this paper wallet:
Just like this wallet:
All three have the same Bitcoin address and the same private key, all three are equally valid and functional, while maintaining the convenience of the first two sentences via a QR code.
When do we go to “how”, let’s go to “why”?
There are many reasons to create and replenish a paper wallet, here are some:
Safety, security, security. Storing a coin in a paper wallet protects against cyber attacks in the form of a coin (if you create it safely) by removing your coin from all forms of electronic storage. Just remember that if it is connected to the Internet, it is vulnerable… period.
Protection from damaged or faulty hard drives or operating systems, i.e. your 98th Ubuntu reinstallation just went wrong…again. Don’t worry, your coin is safe and sound.
Protection from a lost phone. All you’ve got is a wallet on your phone, have you ever lost a phone? Yeah, me too…
They make a great gift! Don’t be ridiculous, some of those fancy wallets upstairs came in handy. You can print one out and refill it with any amount for a unique and interesting gift. It’s also a great way to get somebody interested in crypto currency.
Long-term deposit of coins. Not going to trade or spend it soon? Then why keep a big balance on the Internet where it’s vulnerable. Put it in a cold vault and sleep tight.
This is becoming a reality! Okay, you can laugh a little about it, but some people prefer the material cyber, and printing a coin in the form of a paper wallet brings them comfort and peace of mind, each one individually.
Did I talk about safety, safety, safety?
And now about how.
I must start by saying that you can never be too careful when it comes to your crypto wallets, whether they are electronic or paper. You need to take all possible steps to protect your assets, which in this case is equivalent to protecting your private key(s). In this case, “every possible step” for one person may be different than for another. It is here that you need to find your own level of comfort, I personally get into a rather careful and diligent kingdom. That is, I am far from sweeping bugs and wearing foil hats, but I really do take steps that others may find unnecessary. Of course, if my portfolio grew to stunning proportions, I’m sure I could make a foil hat look damn good.
short version (i.e. don’t do it):
Go to one of several free sites and create a couple of addresses and keys for your wallet.
* Print it out.
* Send funds to the address.
* Keep your paper wallet in a safe place.
* Let’s fill these steps with some content.
* Create a couple of addresses and private keys.
There are two main ways to do this using an online wallet creation tool, or using a utility such as the Bitcoin Address Utility, or the Litecoinaddress client. For our purposes, let’s focus on the online tools available on sites like these.
Any of these options can make a wallet for you quickly and easily, but you should seriously consider how to use it safely. If your computer is online when you use it, you are vulnerable. Therefore, it is a good idea for you to at least use it:
1. Go to one of the above sites and let it boot;
2. Then completely disconnect your computer from the network (LAN, Wifi, Bluetooth, AirPlay, etc.);
3. now follow the instructions to create your wallet(s). This is usually done by unstable moving the mouse to control a random generator that will produce the private key(s);
4. Print the wallet(s);
5. Clear your entire cache, including printers if it has memory;
6. Log back into the network;
7. Transfer the coins to your wallet(s);
8. Make sure you have the funds;
9. Keep the paper wallet(s) safe.
It’s a minimum offer, and you probably feel it’s good enough for you. Maybe you have good karma, or maybe you don’t keep as many coins as you really do that all the fuss, or maybe you are brilliantly ignorant and you like it. That’s your money.
Next thing you have to do is print out your wallets. Think about how you’re going to do that. A paper wallet functions just like a cash wallet, so if you lose it, or it is destroyed, the coin it holds will disappear forever. With that in mind, I prefer to print my paper wallets with a laser printer on thick, coated paper as laser prints cost much better than inkjet prints.
Tip: Print more than one copy of each wallet and store them in different locations as protection against loss due to unforeseen circumstances.
After printing, it is time to transfer funds to wallets. I assume you are familiar with how to transfer the coin to the address, so I will not go into details here. Suffice it to say that transferring a coin to a paper wallet is no different from transferring between electronic wallets.
I strongly recommend that you make sure that the coin is fully translated. You can do this by entering the address of a paper wallet on one of the several sites that search for interlocks.
The nature of Bitcoin and Litecoin blocks makes it possible to search for all deposit, withdrawal and balance information at any given address. While this is a very useful tool, being a big fan of privacy, I also consider it another good reason to have multiple wallets and disperse your assets among them.
For Bitcoin I suggest to use blockchain.info, for Litecoin I suggest to use ltc.block-explorer.com or ltc.blockr.io.
To transfer a coin from a paper wallet to Bitcoin-QT or Litecoin-QT:
Run Bitcoin-QT or Litecoin-QT.
sеlect “Help” (to the right of “Settings”).
sеlect Debug Window
Next to the input field > enter importprivkey .
Example: importprivkey KxYurEYyRB4W2EdkYU7cKKUZttZcrPFZ8rZHAr45WZGsofh4RGgQ
I hope this article has been useful and you will consider using paper wallets to protect your coins and the possibility of exchanging crypto currency, using them as gifts.
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