A Beginner’s Guide to Bitcoin Paper Wallets
By: Ofir Beigel | Last updated: 10/23/20
A paper wallet is a general term given to a piece of paper with a private key (or seed phrase) written on it. It’s considered to be one of the best practices for keeping your private key safe. In this post I’ll explain how to create a paper wallet from scratch.
Don’t like to read? Watch our Video Guide Instead
Paper Wallet Guide Summary
Here’s the short way for creating a paper wallet:
- Go to BitAddress
- Generate a random private key
- Click “paper wallet”
- Choose how many copies you’d like to print out
- Encrypt the wallet with a BIP38 password (optional)
- Print and enjoy 🙂
That’s how to create a paper wallet in a nutshell. If you want a detailed explanation about the process and how to make sure it’s more secure keep on reading. Here’s what I’ll cover:
- What is a paper wallet?
- The simple (non secure) way to create a paper wallet
- The advanced (secure) way to create a paper wallet
- Keeping your paper wallet safe
- Frequently Asked Questions
1. What is a Bitcoin Paper Wallet?
A private key (or seed phrase) is like the password for a Bitcoin wallet. It should be kept offline in what is known as Cold Storage. A private key is a long, confusing string of random characters, while a seed phrase is a set of 24 random words that allows you to restore your private key.
Simply put, a paper wallet is a piece of paper that has your private key written on it. This makes sure that your private key is kept offline away from the hands of hackers.
Usually this process will be done for the purpose of storing large amounts of Bitcoin. It’s considered much safer than keeping coins on a hot wallet (i.e. a wallet that is connected to the internet).
When storing your Bitcoins on a paper wallet you can only load funds to the wallet. If you want to send those funds you’ll need to import or sweep the paper wallet’s private key to a software wallet in order to get access to your coins.
Here’s an example of a paper wallet:
The Bitcoin address is written on top while the private key is written on the right side
2. The Simple Way to Create a Paper Wallet
Creating a paper wallet is pretty easy, the trick is to secure it correctly. If you just want to see the process in action and don’t care that much about security you can follow this process:
- Head over to BitAddress (an open source software for producing paper wallets).
- Move your mouse around / enter random text to help generate a random private key.
- Once done, choose “Paper Wallet” and print out the results. Your Bitcoins can then be stored through the public address on the left.
- You can also add a passphrase to encrypt the paper wallet for additional protection by ticking the BIP38 encryption box.
That’s it! The process literally takes 30 seconds and you have your own paper wallet. You can generate as many addresses as you’d like by entering the amount on ‘Addresses to generate’. The addresses will all be unique and different.
Here’s the whole process in video:
Why is this considered non secure ?
First of all, since you’re connected to the web while doing this, someone may have the ability to see what’s going on on your screen.
Second, if someone was able to hack BitAddress for example, they can collect all of the private keys that people created on the site.
Last but not least, if you’re using Windows you may have been infected with Malware which you are unaware of. This may put your private key at risk as people may be monitoring your actions.
3. The Advanced Way to Create a Paper Wallet
If you’re really serious about safeguarding your Bitcoins you have to make sure you create an ultra secure paper wallet. The process is a bit tedious but if we’re talking about a large amount of money, it’s worth the effort.
The necessary tools
This process is designed for PCs (a Mac tutorial will be coming soon but for now you can get the general idea). Here’s what you’ll need to download to your computer before getting started:
Ubuntu download (latest version) – The operating system we’ll use
LiLi download (latest version) – A software to install Ubuntu on our flash drive
BitAddress download – The software to create the paper wallet
You will also need a brand new (or completely formatted) flash drive.
Step 1 – Install Ubuntu on your flash drive
IMPORTANT: This step will erase everything you have on the flash drive.
- Open up LiLi and insert your flash drive.
- Make sure you’ve selected the correct drive (click refresh if drive isn’t showing).
- Choose “ISO/IMG/ZIP” and select the Ubuntu ISO file you’ve downloaded in the previous step.
- Make sure only “Format the key in FAT32” is selected.
- Click the lightning bolt to start the format and installation process
After the process is finished, unzip the BitAdrress file you’ve downloaded in the previous step and copy it into your flash drive.
Step 2 – Go offline and test the printer
At this point you should disconnect your computer from the Internet whether it has Wi-Fi or a LAN connection. Make sure there’s no way remote access can be granted to the computer. When finished, make sure you are still able to print a test page so you’ll know your printer is functional.
Step 3 – Run your computer using Ubuntu from your flash drive
Restart your computer. Clicking F12 or F1 during the boot-up process will allow you to choose to run your operating system from your flash drive (#6 in the image below).
After the Ubuntu operating system loads you will choose the “try Ubuntu” option.
Step 4 – Setup a printer on the Ubuntu operating system
At this point you will want to set up your printer on the Ubuntu OS:
- Click on System Settings (a monkey wrench and cog wheel icon)
- Click on “Printers”
- Click on “Add”
- Add your printer
- Print out a test page
Step 5 – Open BitAddress and print your new paper wallet
The final step will be to open the copy you have of BitAddress.org and create a paper wallet locally on your machine.
- Open private browsing in FireFox (right click -> “Open a New Private Window”)
- Type in the following in the address bar: file://cdrom/bitaddress.org-master/
- Click on the link “BitAddress.org.html”
- Create your paper wallet by moving the cursor around until the number on the top right reaches 100
- Choose “Paper Wallet” from the menu
- Choose how many copies you’d like to generate
- Add BIP38 encryption (optional)
- Print out your paper wallet
Why is this process considered secure?
- You’re not connected to the Internet while producing your private key.
- You’re using an “out of the box” operating system which reduced the chance for Malware.
- You are using an offline version of BitAddress so no one can hack it.
4. Best practices for keeping your paper wallet safe
Once you have your paper wallet you can load funds to it by using the Bitcoin address on the left side. It’s important to keep the private key (on the right side) hidden and discreet.
Here are a few methods you can use to better safeguard your paper wallet:
- Get it laminated so it doesn’t tear or fade
- Keep it inside a safe or a location that only you can access
- Use a device like Cryptosteel to make it disaster proof
An advanced method includes creating several copies of the paper wallet, each holding only part of the private key or seed phrase. For example, creating three partial copies that any two of them can create the whole private key. Here’s how it should look:
This way you can leave each copy at a different location and make it harder for someone to obtain your private key if they only stole one copy.
5. Frequently Asked Questions
How Do You Import a Paper Wallet into a Software Wallet?
When the time comes and you want to send Bitcoins from your paper wallet you’ll need to import the private key or seed into a software wallet. While each wallet is different in its process the general idea remains the same:
- Download a software wallet
- Click on “New Wallet”
- Import and existing seed / private key
- Scan the QR for the private key of your paper wallet (this is much easier than typing the whole key)
Important! Do not do this process on a wallet that is already holding funds as it may override the current private key. It’s best to download a new wallet / app and import for this process.
6. Conclusion – You Need Cold Storage
If you’re serious about Bitcoin and want to store large amounts of coins you need to get some form of cold storage. If you can spare some more, I suggest using a hardware wallet, but if you can’t afford it or want to avoid it for any other reason, a paper wallet is the way to go.
My personal advice is that if you do end up using a paper wallet, take the time to go over the secure advanced method and create an ultra secure one. The extra 30 minutes or so you’ll invest in the process may end up to prove worthwhile.
Have you had any experience with paper wallets? What’s your favorite method for creating it? I’d love to hear about it in the comment section below.
I’m still super new to crypto, but from basic computer knowledge what I do know is that if all you want to do is store letters and numbers (alphanumeric) characters for the codes than just put your keys into a text file and use any program that can do file encryption like winzip or 7zip or many of the other programs which many are free. they usually offer at least 128 bit if not the full 256 bit AES encryption which has not been known to be cracked yet. you can even scan in your QR codes and save the whole thing as a jpeg. If you want to be sneaky put that encrypted file inside of another encrypted file , inside of another, etc. than I would just store it in multiple places like your email, your mom’s house, hidden in the car or under it (maybe on a micro SD card wrapped with plastic). etc. and than store your password with a super easy password and hide it somewhere you can find it and also I guess back that up to multiple places too. if they crack your password to reveal the password, they still would have to know that it’s for crypto hidden who knows where. or you could just make all of the password easy to remember if you don’t want a password reminder. its 256 bit encryption, they’ll never crack it anyways unless they have a quantum computer
Thanks in advance for your effort and diligence in educating your visitors. I believe that more on the people, code’s logic, development processes, and money trails is needed.
I am completely new to bitcoins, cryptocurrencies and all the 9 yards of it but I learned quite a bit from your side and the free introductory set of articles/videos. However, I feel that there is some aspect of it that’s rather “fuzzy” – maybe just unclear to me – that is not addressed by your site and other sources of information about the subject. Examples of more specific questions would be: “What’s the logic used in the development of DAI’s?” etc. Another aspect of importance to me is “Who are the people involved in the development processes?” “Who’s behind them, how are they supported, and are there any checks on their activities?” “What are the philosophical/political ideas that drive it all?” etc. There is an overall ‘sense’ of activism associated with the idea of the bitcoins, cryptocurrency, and all the concept of decentralized finances that does not seem to excite the big bosses of the financial sector (e.g. the more recent comments made by JP Morgan-Chase CEO, Jamie Dimon and others.). Also, what are the risks to the whole system when big banks start investing heavily in cryptocurrencies and thus make it all susceptible to their manipulation and defining its direction? Maybe it’s just an idea spun by a techie brit with a Japanese pseudonym who has an axe to grind with the financial sector!…
These are great questions, and we can certainly look into providing future videos on such subjects. Regarding your question about big banks investing, it’s unlikely that banks are going to do that at this time given that they are worried about the crypto space taking over the financial system. They want to remain in control and don’t want digital assets in play because they feel they present risks to the economy, so you probably don’t need to worry about that just yet.
Thank you for the reassurance about the financial institutions’ investments into the crypto sector. I did a quick research on this and it seems that it might be already happening. For example, JP-Morgan Chase invested well over $200 million into cryptocurrency companies, an example of which is ConsenSys, an ethereum software company. Citibank (4th largest bank in the US) invested close to $300 million. SETL with its famous blockchain ledger was one of the recipients of these investments. To top that, Standard Chartered invested close to $400 million that fed – among other important crypto players – the blockchain network Ripple (XRP token, a crypto with a capitalization of close to $50 billion.) These are not negligible investments nor could they be a source of comfort. It does definitely prevent me from going on sans-soucis…
We understand your concerns about these investments. Bear in mind, however, the following: many of these investments were made as a way of staying ahead of the game. They arguably feel that crypto is not going anywhere, and as the demand for crypto increases, they want to be able to keep their customer base, and this we can understand. So for example, JPMorgan invested in the crypto space by creating its own currency that members can use to garner access to payment tools. This asset is not a mainstream asset and is designed specifically for use in the JPMorgan infrastructure, and Standard Chartered appears to have invested in Ripple as a way of gaining access to its payment/remittance system. This technology has proven faster and more effective than applications like SWIFT, for example, but again – this is more an investment and utilization of the technology behind the currency, not the currency itself. Does that make sense? So while banks are beginning to invest in crypto here and there, they are not necessarily investing in them as a means of taking over the space but rather as a way of staying up to date and remaining appealing to customers.
I have a question=
Can i make a ether paper wallet using myetherwallet (MEW) offline by downloading ZIP file on tails OS without any internet connection but on a used computer, considering that TAILS OS does not leave any sort of digital footprints. Also not printing that paper wallet considering the printer hard disk may store your information/data. Just noting down the private key and public key on piece of paper.