Question about paper wallets

[501]

I've been reading about paper wallets and how they are supposed to be one of the most secure ways to store your bitcoin. What bothers me is this - if I were to withdraw my entire USD bank balance as cash and then hide it in a safe in my house, I would not feel secure about that at all; I would be constantly checking it, thinking of hiding places in my house to move the safe to, acting nervous whenever I left the house, etc. Isn't a bitcoin paper wallet basically the equivalent of just storing cash in your house? So if someone were to break into your house and take the piece of paper, they would have access to all of your money. I also read that there is currently no way to assign a passphrase to a paper wallet. So if this is true, I'm not sure I understand exactly why paper wallets are considered to be such a safe mechanism.

I have been holding my bitcoin and I don't plan to spend it any time soon. I'm holding it as more of an investment so I can spend them later, so I do not need to have ready access to my wallet. Would a paper wallet be my best bet, or is there something even better?

Sorry for the noob question. Just trying to be safe with my bitcoin 

[bardi.harborow]

You can assign a passphrase to a paper wallet. Just encrypt it with AES (using https://encipher.it for example). Paper wallets are just safer because they require physical access to be hacked as opposed to computer wallets that require "malicious software that tracks your keystrokes in exchange for free smileys" (quote from Chrome's incognito mode). Yes, you have to take measures to secure your paper wallet but anyone who breaks into your house and finds your paper wallet under the floorboards probably isn't going to know about bitcoin.

[huadylmate]

Isn't a bitcoin paper wallet basically the equivalent of just storing cash in your house? So if someone were to break into your house and take the piece of paper, they would have access to all of your money. I also read that there is currently no way to assign a passphrase to a paper wallet. So if this is true, I'm not sure I understand exactly why paper wallets are considered to be such a safe mechanism.

You may use brainwallet or encrypt your paper wallet, but you have solve next thing: what if you forget the passphrase (happens often if you dont use it longer) or you die in accident.

[DannyHamilton]

What bothers me is this - if I were to withdraw my entire USD bank balance as cash and then hide it in a safe in my house, I would not feel secure about that at all; I would be constantly checking it, thinking of hiding places in my house to move the safe to, acting nervous whenever I left the house, etc.

You feel safe storing your USD balance in a bank because the banking industry is regulated, audited, and insured.  If someone at the bank screws up and the cash at the bank is stolen, you can count on the government coming in and restoring your money to you.  There is no similar concept in bitcoin. You are responsible for your own money.

Isn't a bitcoin paper wallet basically the equivalent of just storing cash in your house?

Somewhat, except that you can't create backup copies of your cash, and you can't encrypt your cash with a password.  Of course, if an average criminal breaks into your home, and sees a pile of cash, it's pretty much guaranteed that they'll know exactly what they are looking at and be immediately aware of how much it is worth.  If the average criminal breaks into your home, and sees a piece of paper with some letters and numbers written on it, they are far less likely to take it (unless they knew you owned bitcoin and specifically came looking for it).

So if someone were to break into your house and take the piece of paper, they would have access to all of your money.

Only if you didn't encrypt it with a decent passphrase first.

I also read that there is currently no way to assign a passphrase to a paper wallet.

Not true.

So if this is true

It's not.

[501]

Thanks for the replies. So please tell me if I am understanding the process correctly:

1) I generate the paper wallet address and private key.
2) I use encipher.it to encrypt the private key with a password.
3) I write down the address and the encrypted key on a piece of paper.
4) I remember the password in my head, and don't write it down. So the paper only has the address and the encrypted key.
5) Store the paper somewhere. Probably even safer to just leave it out on a desk instead of putting it in a safe, so it looks like trash and thieves won't steal it.

Is this all right?

Also, when I want to restore the funds later so I can spend them or move them somewhere else, how would I de-encrypt the key, and then where would I enter the address+key to access the funds? I'm currently using blockchain.info wallet but it just generated the address/key for me, I didn't see a place to enter your own if you already have one.

[501]

I saw this thread has already been pushed down to page 4, so just wanted to see if anyone could verify that I have the steps correct? ^