What is a paper wallet?

As you are perhaps aware, it is not really safe to store large numbers of bitcoin (for long term storage) on exchanges or online wallets. So are paper wallets a better solution? Sadly not!

Paper wallets are pieces of paper, usually generated from a website, which contain a printed copy of your private key, additionally they often contain a QR code representation of your private key as well.

Paper wallets were very popular from around 2011 to 2107, however they have now fallen out of favour and are considered insecure ways to store private keys for your bitcoin.

Here are some reasons why papers wallets are an insecure way to store your bitcoin private keys. Most office printers have a built in hard disc which stores everything that gets printed and anyone who reads the file stored on this hard disc will be able to see your private keys and thus steal all your bitcoin. If you decide to print your paper wallet to a local printer over Wi-Fi then anyone listening in will be able to copy your private keys.

The paper used with paper wallets can also be easily torn, shredded, lost or stolen and the ink used often fades.

Below is an example of a water damaged paper wallet - almost certainly of no use to anyone!

It is also worth noting that if you are showing someone your QR code (that represents your private key) and you decide to hide the QR code using blurring - it is possible to unblur the code and reconstruct the original QR code.

Back in October 2017, Roger Ver was on French TV and showed the private key and public key to one of his bitcoin wallets, the television channel decied to obfuscate the private key by blurring the image - the wallet contained around $1,000 - some clever folks managed to unblur the image and recrate the original QR code and of course empty his wallet. You can read how they did it here.

Paper wallets can be printed from the website www.bitaddress.org which generates public key and private key pairs (as fast as you can cick) that can be used to send/receive bitcoin - however you are connected to the internet whilst generating these keys and as secure as the website appears with its ‘entropy randomness’ generator it should only be used for educational purposes.

As we keep saying and we will say it again, never ever give anyone access to your private key.