Paper wallet
A paper wallet is a sheet of paper with the keys to a crypto wallet. You can use it to receive and send crypto, but if you lose the paper, you could lose your crypto for good.
What is a paper wallet?
A paper wallet usually has two keys: a public key and a private key. The public key is your wallet address, similar to an account number. Other people can send crypto to it.
The private key is secret and gives you access to your crypto. Think of it like a password that you should never share with anyone. Both keys are often printed as QR codes, so you can scan them.
A paper wallet is a form of offline storage, also known as cold storage. As long as the private key never goes online, hackers and malware can’t access it.
An example of a paper wallet
Suppose you have Bitcoin sent to the address on your paper wallet. The Bitcoin is then held at that address on the blockchain, while you keep the access code on paper.
Want to send or sell the Bitcoin later? You’ll need to import the private key into a software or hardware wallet. The key will then have been online. This means the paper wallet is no longer fully offline, so this storage method is essentially meant for one-time use.
Why are paper wallets important in crypto?
A paper wallet shows that you don’t literally store crypto on paper. You store the keys that give you access to your crypto. Whoever has the private key can control the crypto.
You may come across this term in articles about offline storage and crypto security. Offline storage protects against digital attacks, but not against fire, water, wear and tear, or theft.
If the paper is lost or becomes unreadable, there’s no way to recover it. A paper wallet isn’t automatically safe: keeping it secure is just as important as keeping it offline.
