Advertise on the blog banners, articles, newsletter

Investments & Earnings / Криптовалюты / Кошельки для криптовалют

Криптовалюты / Кошельки для криптовалют 31-01-2019 15 0

HTC Smartphone with a Built-In Cryptocurrency Wallet Paper wallet for cryptocurrencies: what it is and how to create it

We offer you a step-by-step guide to creating a paper wallet — the safest way to store cryptocurrencies offline.

As the popularity of cryptocurrencies grows, there are more and more cases of fraud and hacking. Now at every step you can encounter fraudulent ICOs, shadow exchanges, fake wallets, pyramid schemes, phishing, pump and dump schemes, scammers on Twitter, and so on. The risk of losing crypto coins these days is greater than ever, and it is almost impossible to track down the fraudsters.

It is very important to store your cryptocurrency in a safe place. Although there are also many storage options now, none of them is as secure as a paper wallet.

Bitcoin and other cryptocurrencies are partly popular because they do not need a centralized authority or bank to process and approve transactions, as well as to store the coins. By using cryptocurrencies, users get fast transactions and low costs for processing such payments. In addition, cryptocurrency transactions cannot be changed or canceled after they are launched.

Transaction records on the blockchain are anonymous, and this makes it difficult to track the recipient of a payment. On the other hand, such "features" of the blockchain mean that fraudsters and hackers can steal your crypto coins, and in this case the transactions also cannot be canceled.

Thus, the era of blockchains requires fund owners to use guaranteed secure ways of storing them, and the type of wallet used is of the utmost importance.

There are different types of wallets: some allow you to store your crypto coins, but do not grant you ownership of them. For example, most crypto exchanges will provide you with a wallet. However, when your cryptocurrency is in it, this actually means that only the exchange owns your funds, and you have to trust the exchange like a bank. So how do you get ownership of your crypto coins?

Private keys are ownership of your own cryptocurrency

Private keys are similar to passwords that provide full access to your crypto coins. Owning them is owning the coins, and the secure storage of secret keys is of paramount importance. This is the most important consideration when choosing the type of wallet you intend to use.

Types of wallets

There are different kinds of wallets, and each of them has its own advantages and disadvantages. There is no solution that would meet all needs at once, and therefore the choice is up to the users. Wallets can be classified into two main types: "hot" and "cold".

Hot wallets are those that are constantly connected to the internet. Online wallets, exchange wallets, cloud, desktop and mobile wallets all fall into this category. They provide faster access to your funds if you need to conduct a trading operation or spend cryptocurrency on something. However, there is always a great risk of hacking for them, because such wallets are always connected to the network.

Cold wallets are those that do not have a constant connection to the internet. Hardware and paper wallets fall into this category. Hardware wallets usually look like a flash drive that the user connects to a computer to transfer and manage funds.

Paper wallets do not require an electronic interface. Paper wallets involve printing private and public keys on paper and storing them offline (without a network connection) in a secure physical location.

What is a paper wallet?

A paper wallet is a piece of paper on which private and public keys are printed in the form of a QR code. To use these keys, you will have to scan them.

Why use paper wallets?

Paper wallets are generally better and safer than any other type of wallet. Here are a few reasons to use them:

1. They are easy to use. Creating a paper wallet does not require much effort or technical knowledge. A few simple steps will significantly secure your coins. Using hardware wallets is much more complicated.

2. They are offline. Such a wallet is not available online to hackers and fraudsters, as it lies in your locker. Your currency is represented as a piece of paper on which the keys are printed. Such a wallet is like an expensive cashier's receipt, with which you can use the funds or transfer them to anyone.

3. No hardware problems. Paper wallets are more durable and secure than hardware wallets, which can be damaged and which may have software malfunctions. A paper wallet is the simplest form of storing cryptocurrencies.

4. Easy to pass on to a loved one. If something happens to the cryptocurrency owner, his loved ones are unlikely to be able to access his exchange or hardware wallets. However, a paper wallet can easily be stored as part of valuable assets in his locker or physical space.

Read also: "Thank you, Satoshi": BitMEX congratulated bitcoin on its anniversary on the front page of The Times
A trusted person from the circle of friends or relatives of the cryptocurrency owner may know about the wallet and these funds without having access to them until the owner becomes incapacitated.

How to create and use a paper wallet?

So how do you create a paper wallet and use it? Let's follow a simple set of instructions for creating a paper wallet. Creating a paper wallet is usually done using software that can then be deleted.

Follow the steps listed below:

Step 1: Prepare the computer. Since the creation of paper wallets is performed on a computer, there is always a risk that a hacker or malware will try to capture your keys. Therefore, it is recommended to create a wallet on a computer that you trust, and this should not be a publicly accessible or someone else's machine. Even on a trusted computer, you need to make sure that there are no viruses or malware. You need to update your antivirus program in time and check the machine for security problems.

It should also be noted that the process of creating a paper wallet should not be performed using public Wi-Fi. Hackers obtain information from networks very easily, and this means that they can direct you to a phishing site and steal your funds.

For additional security, you can make sure that your operating system is "fresh out of the box".

Step 1.1: Setting up an ultra-secure environment. This is also an additional security measure that does not suit everyone. However, if you want to make sure that absolutely nothing threatens you when creating a paper wallet, then this step can be applied.

Download the latest version of the Ubuntu operating system and install it on a flash drive. Then run this operating system to make sure you are creating your wallet in an ultra-secure environment. You will need to download the LiLi program, which will allow you to install and run Ubuntu from a flash drive. In this case, you also need to download the Wallet Generator zip file, and then reboot the computer into the Ubuntu OS.

If you decide to do without such an ultra-secure environment, you can go straight to step No. 2.

Step 2: Downloading the program. Go to the page: walletgenerator.net. Wallet Generator can use client-side javascript software to generate a private key, which can later be printed out. This means that you will not need an internet connection when generating the key.

Step 3: Download the zip file. From walletgenerator.net you download a zip file that contains javascript codes and that will help generate your private keys and a paper wallet for printing.

Step 4: Go offline. Once you have downloaded the files, it is best to disconnect from the internet, and you will have a secure offline environment for generating keys.

Step 5: Generating keys. By moving the mouse, you will see random numbers being generated and a countdown to "0". This is the process of adding a variable when generating your keys. As soon as this process ends, your private and secret keys will be ready.

Step 6: Ready keys. You will see two barcodes. One with the green label Share and an address below will be the public key, and you can deposit funds to this address. And the second barcode with the red label Secret is your private key.

Step 7: Print and save. You will be provided with a page to print with basic instructions, which you need to print and save.

Step 8: Cleanup. After the wallet is generated and saved, it is advisable to delete the wallet creation program files and the internet search history. Now you can also connect to the internet.

Step 9: Protection against unauthorized access. Now you need to make sure that no one has unauthorized access to your keys. You may even want to do this with special seals or other methods that, if breached, will clearly indicate physical interference.

Step 10: Protection against harmful effects. For paper wallets there are also risks of ignition, exposure to moisture and water, as well as natural decomposition of the paper. The easiest way to prevent these risks is to create several copies and store them in different secure places.

Another option is to print the wallet on a more durable and waterproof material. This will require a special printer, but if it concerns long-term storage, it may be worth the cost.

Conclusion

Now you store your funds in a paper wallet. This sheet of paper holds the entire value of your cryptocurrency coins. Your coins will thus be protected very reliably, but only until you yourself give these keys to an attacker.

Creating paper wallets requires only a little effort, and today it is the safest form of storing cryptocurrencies, especially when it comes to their long-term storage.

HTC Smartphone with a Built-In Cryptocurrency Wallet Paper wallet for cryptocurrencies: what it is and how to create it