Paper wallet; It is an offline storage method used to protect cryptocurrencies from cyber attacks. Paper wallets do not physically store cryptocurrencies, but passwords and information to be used to access them. It is not a document of monetary value on its own.
Paper wallets are a type of wallet that allows people to carry your crypto money without the need for any system, through numbers written on a paper in their pockets.
The information stored in the paper wallet includes the public key, which allows people to transfer money to this wallet, and the private key, which provides access to fund expenditures. It should be noted that in this method, Bitcoins are not stored offline, you only store Bitcoin addresses offline.
Paper wallets were popularly used between 2011 and 2016, but it is not recommended anymore as the use of paper wallets brings some risks. Paper wallets can be damaged or destroyed quite easily due to the physical fragility of paper. The security of the devices that play a role in the creation of paper wallets also affects this situation. After printing the paper wallet, it is important to use a computer and printer that does not store the data used to print the paper wallet.
Advantages of Paper Wallet
Physical wallets have long been considered one of the safest ways to store Bitcoin. If these wallets are built properly and certain precautions are taken, it will be nearly impossible for a malicious user to access their Bitcoin assets. A paper wallet is considered an extremely secure way to protect Bitcoins against cyber attacks, malware. At this point, it is important to remember that the money printed like normal currency is not Bitcoin.
Some paper wallet services offer users the option to generate new addresses and keys while offline. To do this, users need to download the wallet generator as an HTML file and run it without an Internet connection. Due to the possibility of offline address generation, paper wallets are often considered an alternative to cold wallets. One of the reasons why paper wallets are secure is because they are analog, so hackers and other attacks that can only be carried out in the digital environment generally cannot affect paper wallets.
Disadvantages of Paper Wallet
While paper wallets offer security advantages, some paper wallets also carry great risks. Although cyber attackers cannot access the printed keys, there are different ways to access these valuable pieces of information. For example, printers connected to larger networks often store information, and cyberattack software can be secretly installed to steal keys during the creation process.
A printer that uses cheap ink can smudge, leak, fade over time and render the wallet inaccessible. The same concerns apply if the paper is lost, stolen, torn or otherwise damaged. These also present problems if the user misreads a key or if the wallet software no longer recognizes the private key format of the printed wallet. Another danger of using a paper wallet is that multiple transactions cannot be made with funds from the same wallet.
