Paper Wallet is a best alternative for those who cannot afford hardware wallets like Ledger Nano S and Trezor. Hardware wallets are best to store Bitcoins. However, if one cannot afford hardware wallet then he/she can transfer his/her Bitcoins to a paper wallet. A paper wallet consists your public Bitcoin wallet address and private key along with two QR codes for your wallet address and private key. If you’re a long term Bitcoin investor then you should transfer your Bitcoins to a private key or hardware wallet. On the other hand, if you’re doing Bitcoin trading then you’d keep your Bitcoin online all the time to save sweep private key charges. If you’re storing your Bitcoin online through an exchange then for your information your Bitcoins are always vulnerable to many security breaches like your Bitcoin exchange may get hacked (like NiceHash, a prominent Bitcoin exchange, got hacked and more than $64m had been stolen- Source) and you can lose your Bitcoins. Therefore, don’t trust anyone and take command in your hands. This post will help you transfer Bitcoin to a paper wallet.
Transferring Bitcoins to a paper wallet is not a sophisticated process. All you need to do is find a software client that helps you create a wallet address and private key. After creating a paper wallet, you can simply send your Bitcoins to it through your Bitcoin exchange. I’m here to help you do that.
Types of wallets –
There are two types of wallets: cold wallets and hot wallets, to store Bitcoins. Hot wallets keep your Bitcoins online all the time. All Bitcoins exchanges wallets are hot wallets. Since they remain connected to internet all the time therefore there are a lot of possibilities of being hacked. On the contrary, cold wallets are offline wallets. Since they’re not connected to internet, there is almost negative possibility of being hacked.
Different methods to store Bitcoins –
Online Wallet – All Bitcoin exchanges wallets are online wallets. In online wallets you create an account through an exchange like Coinbase, Zebpay, LocalBitcoins.com etc and buy Bitcoins and keep them there. This way you store your Bitcoin on an online wallet. As mentioned above this is a less secure way to store Bitcoins. Online wallets are best for those who do Bitcoin trading.
Software Wallet – Software wallet comes under hot storage. They’re more secure than online or web wallets. Software wallets are available for both desktop and mobile. Some famous software wallets are Armory, Bitcoin Core, Electrum, and Mycelium. The security of a software wallet depends upon the device in which you’re installing it. If your device (Laptop or Mobile) is secure then your software wallet is also secure or vice versa.
Paper Wallet – In paper wallet, you transfer your Bitcoin to a paper that contains your wallet address and private key. This way you store your Bitcoin offline. You’re the only person who is responsible for any security breach. Though paper wallets are more secure than online wallets but they require extra care because if you lose your private key then there’s no way to recover it and you’ll not be able to spend your Bitcoins.
Hardware Wallet – In Hardware wallet, you use a physical device to store your Bitcoins. These physical devices have the ability to store your Bitcoins offline and they let you send or receive Bitcoins securely when connected to internet. As of know, this is a best way to store Bitcoins. Those who have significant amount of Bitcoins this is a must have thing. You can buy Ledger Nano S or Trezor hardware wallet to store your Bitcoin. Since they are expensive therefore if you own a few portion of Bitcoin then use paper wallet instead. (Read: 3 best Bitcoin hardware wallets for 2018 that support altcoins)
Benefits of a Bitcoin paper wallet –
- You can safeguard your Bitcoins from online attacks.
- Only you know your private key so you can take care of it on your own.
- Best way to store Bitcoin offline for long period.
Risks associated with a Bitcoin paper wallet –
- Since paper is a fragile thing, it requires extra care.
- If somehow you lost your private key then you cannot recover it in any way.
- If someone gets access to your private key then he/she can spend your Bitcoins easily.
Precautions to take while generating paper wallet –
- Clean all cookies and browser history before and after using wallet generator.
- Disable all third party browser extensions before generating paper wallet.
- Make sure any malicious program like Trajon is not running on your computer.
- Always make 3-4 copies of your paper wallet and also store it in PDF format using USB device or external hard drive. Make sure that USB or external hard drive never touches the internet.
- Making PDF and paper copies apart, write down your Bitcoin address and private key. Your address and key are case sensitive so write as these’re appearing.
- Do not store paper wallet on a computer that connects to the internet.
- Make sure nobody could scan your paper wallet’s bar codes.
- Do not store your Bitcoin to a single paper wallet instead create more than one and transfer your Bitcoins to all addresses equally. This will help you minimize lose if someone steals your private key.
If you’ve Bitcoins to survive for one month then choose Bitcoin hardware wallet to store your Bitcoins safely. A Bitcoin hardware wallet also supports Altcoins like Ethereum, Ripple, Litecoin etc. Click here to get a list of best Bitcoin hardware wallets that support altcoins. Believe me it’s worth buying.
How to Transfer Bitcoin to a Paper Wallet – Cold Storage Process –
To transfer Bitcoin to a paper wallet, first, we’ll need to create and print a wallet and private key. For that purpose, we’re going to use bitaddress.org, a well-known Bitcoin paper wallet generator website recommended by many exchanges.
How to Create a Paper Wallet –
First of all, we’ll need to save the website’s file in html format on our desktop. For that purpose, open bitaddress.org and right click and select “Save as”.
Now select “Save as type” as Webpage, HTML Only (see above screenshot) and then save it to your computer.
In the next step, turn off your WiFi or internet connection. Make sure your computer is offline. Don’t worry. You can create your paper wallet without internet. Also, see above precautions section and take all the measures.
Now go to the location where you’ve saved html file and open that by clicking on that. Next, enter random text in the text field and simultaneously keep moving your mouse on the screen to create some randomness. Keep doing that until the randomness meter reaches to 100 percent.
Select Paper Wallet then enter 1 in the Address to generate field then tick box front of BIP38Encrypt then add a Passphrase or password to protect your Bitcoin wallet. Subsequently, click on Generate to create a paper wallet.
That’s it. You’ve successfully created a Bitcoin paper wallet. Click on the Print button to print your paper wallet. Note: Don’t store it to a computer that connects to the internet. Always keep your paper wallet offline.
How to transfer Bitcoins to a paper wallet –
You’ve created a paper wallet. Now you can send Bitcoin to your offline wallet through your Bitcoin exchange. To do so, you’ll need to get access to your online wallet. Note: In following steps, I’m using Blockchain.info exchange’s screenshots. If your exchange is different then don’t worry steps will remain be the same.
First of all, login to your Bitcoin exchange where you’re storing your Bitcoins online. Then go to send Bitcoin section like on Blockchain.info’s dashboard you can click on send Bitcoin button to reach to send Bitcoin section. This step may vary depending on your cryptocurrency exchange but next steps will almost be the same.
Now enter your newly created paper wallet address (Note: Do not enter private key) in the “To” field or scan your address’s bar code (make sure to cover your private key with something) then enter either amount or BTC that you want to send to your paper wallet. Advice: Do not transfer all of your Bitcoins to one paper wallet instead create multiple wallets. But do not create too many because you’ve to pay sweep private key charges at the time of sweeping/importing.
Next select other parameters like Transaction Fee (your exchange might not have some options) and the like. Then click on Continue button to send Bitcoin to a paper wallet.
Upon clicking on the button, you’ll be asked to confirm your send request by entering your secondary password; if enabled. Simply follow all the screen instructions to send Bitcoin.
That’s it. You’ve successfully stored your Bitcoin offline. You can check your paper wallet balance by visiting a block explorer service like Blockchain.info offers you. You can visit Blockchain.info website and there you can enter your Bitcoin paper wallet address to check its balance. Note: Never search anything on internet using your private key.
We’ve completed Bitcoin cold storage process. You can read this post to know how to sweep private key.
Disclaimer: This post is for information purpose only. We do not hold any financial or legal responsibility in any manner. Above information may be inaccurate or incomplete therefore kindly verify it or use it own your own risk.