So, I had decided to move most of my funds towards one paper wallet I had printed out for a gift to my father, there I saw how innovative these things were. It was a really good way to secure some BCH after all. It currently makes me wonder if I was able to lose it within an old box and return with high money as the Bitcoin Cash market rose past Bitcoin, or return with it going back to near-zero and a disappointment because the markets kept speculating.
Now, unto the topic itself: What are these paper wallets everyone keeps talking about?
Type of Wallets
Before we talk about paper wallets, we are going to talk about cryptocurrency wallets in general. There are multiple types of cryptocurrency wallets, but the most common types of wallets based on storage and interaction are cold wallets and hot wallets.
Cold Wallets
Cold wallets are a type of cryptocurrency wallet which you don't interact at all. These can be wallets like a hardware wallet or a paper wallet.
Hot Wallets
Hot wallets are called hot wallets because you constantly interact with them instantly. Examples include online wallets, mobile wallets, and applications.
What's a Paper Wallet?
A paper wallet is essentially a printed version of a single address based on cryptocurrency. These things are essentially more secure than a software-based wallet only next to hardware wallets.
Paper wallets are cold wallets and therefore are sometimes used to store money. These things are actually pretty easy to set up, needing only a printer, a formatted picture, and your public/private address pair, but people have created sites specifically to allow users to create paper wallets and even have new addresses built into it through the use of a random algorithm.
How to use a Paper Wallet?
To use a paper wallet, you should first be able to create a paper wallet. For Bitcoin Cash, there are dozens of generators online and you can find them in sites such as bch.info but the current example I'm using Bitcoin.com's paper wallets feature.
https://paperwallet.bitcoin.com/
Most of the instructions around every paper wallet generator site are the same to be fair, but the generalization is this:
You generate entropy— a bunch of random letters and numbers— to determine the address you will get.
Once you have enough randomness, the paper wallet site will show you the address, and depending on the site, can let you choose the design and the multitude of addresses as if you actually copy that entropy and enter it in a BIP39 generator, you can get addresses! (unconfirmed, just a guess)
Right-click to print, do not save the picture. If possible, there is a "print" button ready for you. Bitcoin.com paper wallet has this function.
Follow any folding measures it has. For Bitcoin.com, it's hard to do, but I managed to piece it all together.
Deposit any number of BCH you want to give it, and store it for later.
For the common Bitcoin.com paper wallet iteration, here's how I folded it:
I folded it in half, which strengthens the paper and hides the white portion in the back.
I follow the steps, which I accidentally covered up: Fold the left sides into a triangle and then fold it to the right.
This way of folding, when done properly, will also give you a paper wallet that resembles the ones found on the opening page.
Depositing and Withdrawing
You can deposit in your paper wallet by the QR code or manually typing your address down in your wallet. To withdraw, however, there are two ways:
Sweeping the wallet
Adding the private key to a software wallet like Electron Cash
The best way is to sweep the wallet itself to ensure everything goes through.
Protecting your Paper Wallet
The thing with the internet is that everything you do isn't secure unless you have taken great lengths to cover it, but there is always a backdoor for anything. For this case, paper wallet generators recommend you physically download the generator and run it without the Internet. Bitcoin.com also recommends this by sending you to the page's own download via Github found here.
There are other ways to protect your paper wallet, and one of them is to take your paper wallet's private key and open it using applications like Electron Cash, but that is also unsafe as you're essentially turning your cold wallet into a hot one.
Other ways to protect your wallet all depends on how secure you choose to hide the wallet. You can save it in your diary or someplace that you know you can reach or hide it like a heirloom— on in my case, my gift to a parent who works away more often.
Ending Remarks
Paper wallets are a good choice of sending out Bitcoin Cash and many other cryptocurrencies that allow you to show anyone close to you how to use Bitcoin Cash by physically showing how an address works. These paper addresses can also add to the HODL strategy being able to keep Bitcoin Cash unused therefore raising the value of said cryptocurrency.
If you want to create paper wallets, here are some of the sites that allow you to create paper wallets with Bitcoin Cash:
https://paperwallet.bitcoin.com/
Ensure to save them offline before running them.
This is Rowan, signing off.
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