What is a paper wallet?

[Charles-Tim]

This is a self-moderated thread, I would have posted it in development and technical discussion, but because newbies can also learn from this thread, it is the reason I have the OP in beginners and help. Please post carefully, give your own opinion, but do not spam or deteriorate this thread. Any rank can post, but meaningfully.

Before I joined this forum, there are a lot I misunderstood, this forum helped me a lot. There are many I will read on news today that are incorrect, this forum helped me a lot. Thanks to established members on this forum that helped me in bitcoin-use education process.

What did you think a paper wallet is?

I read this topic few hours ago and I replied to it not quite long, but some reputed members also posted there. With the thread's OP, and some other threads I have read before I noticed the old way that is used to generate paper wallet is what they stick to and not advancing anything when paper wallet has advanced beyond.

What is paper wallet
In my opinion, paper wallet are key(s) that you generated in which the backup is written on paper (laminated paper preferably), metallic sheet or something that is safe enough. But recently, the seed phrase that is backup can produce the keys and addresses needed which you can backup instead of the private key(s).

For instance, just like I generated paper wallet in the old way that single key and address will be generated, I can also prefer to use a HD wallet like Electrum or html file of Iancoleman on safe and secure open source airgapped device to generate a paper wallet. Using any of the two device, I can prefer to backup a child private key and its corresponding address, backup both on paper or metallic sheet. That also makes it a paper wallet. But I would not do that, because the seed phrase is easy to backup, 12 words are secure and safe enough, and I can use passphrase along (extended word) if I want. If I backup the seed phrase on paper or metallic sheet, it is still a paper wallet.

I do not like what people are terming as paper wallet, paper wallet is beyond the old way of generating it. HD wallets supports it. So far the generated wallet is deleted on the open source airgapped device after the seed phrase or private key is backup, then it is a paper wallet.

[1715266179]

1715266179

[NeuroticFish]

I expect newbies usually (wrongly) think that paper wallet has to have fancy images and can be only on paper.
But the normal simple definition for a paper wallet is: a pair of private key + address one can (and should!) store offline.
Even more, a paper wallet should have only inputs, i.e. no transactions sent out of it. If one sweeps it or imports it into a wallet it should no longer seen as paper wallet since it was online.

Indeed, nowadays, some tend to "widen" the definition of paper to "a HD seed and possibly one or more addresses that will be stored offline". While some may see it a bit far from the initial idea, I find the seed much easier to save this. While the rule of being imported also stands, here some extra problems may arise and it's advised one also write down more "advanced stuff" based on his knowledge, like the derivation path and the software used to generate the seed (since Electrum and Ledger, for example, seeds mean different resulted addresses).

I do like that you advise airgapped system for generating paper wallets. People still don't realize how important it is to be generated safely.

[o_e_l_e_o]

I generally agree with NeuroticFish.

The classical definition of a paper wallet is a single private key and single addresses printed on a piece of paper. While some people still hold to this definition, I generally use the words paper wallet in a much broader sense to refer to any wallet which is stored completely non-digitally. This could be a private key on paper, but it could also be a seed phrase on paper or even on metal. There are many benefits to using a seed phrase over an individual private key, from readability to avoiding address reuse. As long as the wallet isn't also stored digitally (in which case the paper/metal copy is simply a back up), then I would term that a paper wallet.

I don't necessarily agree with the statement that a paper wallet should only have inputs, though. I have a number of wallets which are simply a seed phrase written on paper, and I have spent from a couple of these wallets by importing the seed phrase to an airgapped live OS to sign an unsigned transaction imported from elsewhere. As the wallet never went online, and I use the same device to do this as I use to generate the seed phrases for my paper wallets in the first place, then there is really minimal additional risk to doing this.

In addition to ripping out the connectivity hardware in the airgapped device I use for generating paper wallets, I also like to rip out the hard drive and boot from a live OS (Tails) which will erase all traces of my paper wallet when I power down the machine. An additional bonus of using a seed phrase rather than a private key is you can hand write it and bypass having to use a printer, which is another potential attack surface.

[NeuroticFish]

I don't necessarily agree with the statement that a paper wallet should only have inputs, though. I have a number of wallets which are simply a seed phrase written on paper, and I have spent from a couple of these wallets by importing the seed phrase to an airgapped live OS to sign an unsigned transaction imported from elsewhere. As the wallet never went online, and I use the same device to do this as I use to generate the seed phrases for my paper wallets in the first place, then there is really minimal additional risk to doing this.

This is indeed true, however:

* if one starts using the paper wallet, it can - sooner or later - lead to mistakes, from using it in hot wallet to using it for getting fork coins and exposing himself to other possible attacks (replay attack)

* if an address was spent from is, at least in theory, less secure than one never spent from. I don't know the theory that well and from my understanding such exploits won't be available for many years to come (maybe depending on QC too), or at all, still, I don't like it.


So while you're right, I prefer to tell newbies not to spend/"overuse" a paper wallet, especially since it's meant for long time storing, hence better overly safe than sorry.
And it's not that difficult to make another paper wallet for the change when spending is done.

[ShowOff]

The classical definition of a paper wallet is a single private key and single addresses printed on a piece of paper. While some people still hold to this definition, I generally use the words paper wallet in a much broader sense to refer to any wallet which is stored completely non-digitally. This could be a private key on paper, but it could also be a seed phrase on paper or even on metal. There are many benefits to using a seed phrase over an individual private key, from readability to avoiding address reuse. As long as the wallet isn't also stored digitally (in which case the paper/metal copy is simply a back up), then I would term that a paper wallet.

I agree with you on this. This does not mean it is completely made on paper but it is still possible to be made on other objects such as metal or disguised wall carvings. I can imagine someone could back up the seed or private key of his bitcoin address in the locket he wears and that's still in the category in my opinion.

It would probably make more sense if it were interpreted as one of the offline backups rather than just understanding that it was created only on paper.

[Welsh]

I'm actually not a fan of calling it a paper wallet, it gives the wrong impression. I'd prefer to call it cold storage or offline storage, since technically it can be generated a variety of different ways, and you don't even need to have the seed or private key written down on a piece of paper, which could actually be less secure than other methods.

For example, some users might actually prefer to generate the wallet offline, and keep the seeds digitally offline too. That might not be the best option for a variety of reasons including, but not limited to fire, water damage, hard drive failure or whatever might cause the loss of the components of a computer.

However, the same can happen with conventional paper. Laminated only protects against smudging, and water damage. It doesn't really protect against other threats, like fire damage. Although, the largest security threat is probably local theft of the wallet, which is actually pretty difficult to protect against.

Also, while we might think of a variety of different complex ways of hiding our cold storage/paper wallet in plain sight, we might actually be making it more difficult for us due to convenience. Everyone, will have a different threat model, and we can't really apply a universal setup, which would be undeniably the best thing to do for everyone.

So, really it's mostly down to the individual on how they secure their cold storage. Although, one thing for sure is that if you're holding a rather large amount of wealth in Bitcoin, then you definitely need a way of securely generating the private key, and seed. While, probably not ever going online with it. Although, the medium you store it on whether that's digital, physically or hell even through memory (which is definitely the weakest that I've listed) all have their own drawbacks.

For example, something that a lot of people don't consider when they're creating, and storing their cold storage is diseases, and other health issues that might effect their memory. Which, I do believe should be considered much more carefully if the person that's setting this up is over a particular age.

[pooya87]

Technically a paper wallet doesn't have to be HD either and the arguments about the need for change address and possible mistakes when using it are somewhat flawed. This is simply because a paper wallet is a long term storage type of wallet even though it is referred to as cold storage. In other words a paper wallet is a wallet that you don't want to access regularly, or maybe even access it once a couple of years from its creation.

In any case I believe that like any other wallet type, people have to learn the pros and cons of paper wallets and learn how to correctly generate and use them.

[noorman0]

I once defined a paper wallet like this.

Paper wallets only extract private and public keys from offline (noncustodian) generated wallets and write them down on paper to avoid the vulnerabilities of digital storage, so there's nothing special to do. If the wallet you are currently using supports generating offline addresses, it is better than online address generators.

Unfortunately, the post was deleted moments later and still wondering if it was a mistake from my understanding.
I conclude based on what I understand from several sources and from my memory while creating a new eth address on the MEW site (offline mode) which provides private and public key pdf backup files, which can actually be printed on a paper.

Edit:

To make it clear, hope you are referring to another thread? Nothing deleted from this thread.

This is the thread

[NeuroticFish]

For example, something that a lot of people don't consider when they're creating, and storing their cold storage is diseases, and other health issues that might effect their memory. Which, I do believe should be considered much more carefully if the person that's setting this up is over a particular age.

This topic comes out now and then, but I also feel that it's not emphasized enough.
Indeed, people tend to hide their paper wallets and seed backups in various ways, others even rely on their memory for "storing" that. (and it's wrong)

But I don't agree with the "over a particular age" part. Accidents do happen even to the young ones. Whether it's car or even more - motorcycle or bike accident, one may lose some memory. Also human mind tends to store/remember incorrectly various things from the past - the farther it is, the more inaccurate it may be. So no, even the young ones should be careful with that.

People hide your paper wallets from potential wrongdoers, but do it in a way somebody you trust can access it (in special circumstances) and use it for you if you - for any reason - are unable to.

[Charles-Tim]

I'm actually not a fan of calling it a paper wallet, it gives the wrong impression. I'd prefer to call it cold storage or offline storage, since technically it can be generated a variety of different ways, and you don't even need to have the seed or private key written down on a piece of paper, which could actually be less secure than other methods.

There can be wallets on hard drive, I mean the seed phrase or the private key backup on a secure hard drive, even the seed phrase or private key can be written on a metallic sheet, people can call it wallet on hard drive or wallet on a metallic sheet. But calling it paper wallet gives the impression that you do not have to buy anything other than a piece of paper which can easily be gotten from home (and which can be laminated later), giving the impression of almost no-money-require means of generating a wallet for long term bitcoin holding. But that does not mean you can not call your seed phrase or private key stored on hard drive a hard drive wallet too in my opinion.

Unfortunately, the post was deleted moments later and still wondering if it was a mistake from my understanding.

To make it clear, hope you are referring to another thread? Nothing deleted from this thread.

[o_e_l_e_o]

* if an address was spent from is, at least in theory, less secure than one never spent from. I don't know the theory that well and from my understanding such exploits won't be available for many years to come (maybe depending on QC too), or at all, still, I don't like it.

True, but if you are using a seed phrase as a paper wallet as I do rather than just a single address, then you do not need to reuse addresses ever.

I'd prefer to call it cold storage or offline storage, since technically it can be generated a variety of different ways, and you don't even need to have the seed or private key written down on a piece of paper, which could actually be less secure than other methods.

The problem with the terms cold storage or offline storage is that many people use such terms to also include things such as airgapped devices, encrypted USB drives or SD cards, or even hardware wallets, which are all very different things to a paper wallet. Perhaps the term "non-digital" or "non-electronic wallet" would be better? Not nearly as catchy as "paper wallet", though.

For example, some users might actually prefer to generate the wallet offline, and keep the seeds digitally offline too. That might not be the best option for a variety of reasons including, but not limited to fire, water damage, hard drive failure or whatever might cause the loss of the components of a computer.

Offline is the only way you should generate your paper wallets, but if you continue to store the wallets offline but digitally, then it's not a paper wallet; it's an airgapped wallet with a paper back up.

In other words a paper wallet is a wallet that you don't want to access regularly, or maybe even access it once a couple of years from its creation.

I still find it preferable to use a seed phrase. Even if you are never spending from the wallet, a seed phrase allows you to top up the wallet with more funds whilst still using new addresses to protect your privacy.

[KingsDen]

Even more, a paper wallet should have only inputs, i.e. no transactions sent out of it

For it to be called a cryptocurrency wallet, it must be able to send, recieve and store coins. So, a paper wallet should remain a paper wallet even when there is a transaction output.

I'm actually not a fan of calling it a paper wallet, it gives the wrong impression. I'd prefer to call it cold storage or offline storage, since technically it can be generated a variety of different ways, and you don't even need to have the seed or private key written down on a piece of paper, which could actually be less secure than other methods.

I always had some difficulties explaining this to my self satisfaction, let alone to others.
I think a cold storage or offline storage is not exclusively for paper wallets. Hardware wallets are also a type of cold storage and more, so calling it cold storage might sound confusing.
By definition, a paper wallet should be a paper on which a public address and private key are writing or printed on. This definition is assume to be in existence because paper was the first means learnt to write down the keys. Maybe inks started to fade and paper began to tire and metal came in use. We cannot then call it also a metal wallet, if so, I can write my keys on the wall of my secret inner room and call it a wall wallet.
So, I think that is how the paper wallet became generalised.

[Marvelman]

In other words a paper wallet is a wallet that you don't want to access regularly, or maybe even access it once a couple of years from its creation.

I still find it preferable to use a seed phrase. Even if you are never spending from the wallet, a seed phrase allows you to top up the wallet with more funds whilst still using new addresses to protect your privacy.

That is exactly what I would like to do.

Without going into all the details, this is my idea:
- generate a new seed phrase and wallet (as securely as possible)
- store a paper backup in a safe location
- use the xPub wallet key to create a watch-only wallet on my device
- generate a new address for each new deposit to protect my privacy

Have I missed anything?

[o_e_l_e_o]

- generate a new seed phrase and wallet (as securely as possible)

Use an permanently airgapped device, running a live OS. I would suggest Tails from a bootable CD, as this has Electrum already installed and avoids the risk of data being written to a USB drive. Preferably physically remove the WiFi card and hard drive from your airgapped device. The potential downside to this (depending on your use case) is you would generate an Electrum seed phrase rather than a BIP39 seed phrase.

- store a paper backup in a safe location

Write down the seed phrase by hand rather than print it. Make sure you have more than one copy.

- use the xPub wallet key to create a watch-only wallet on my device
- generate a new address for each new deposit to protect my privacy

What software are you using to create a watch-only wallet? If ultimate privacy is your goal, then be aware that using a light wallet with a master public key will still expose all your addresses as belonging to the same wallet to whichever servers your light wallet connects to.

Last question - how would you plan to spend from this wallet?

[Synerggy]

Paper wallet should be called offline storage, it fits more this way than calling it paper wallet, to me its more safer than even hardware wallet simply because all you need is the address, no need to connect it online just send your coin to your address and track your address using blockchain explorer.

[TreyARC]

The most successfully exploited crypto wallets are done through online, the offline part of paper wallet makes it the best of them all

[Odusko]

This is a self-moderated thread, I would have posted it in development and technical discussion, but because newbies can also learn from this thread, it is the reason I have the OP in beginners and help. Please post carefully, give your own opinion, but do not spam or deteriorate this thread. Any rank can post, but meaningfully.

Before I joined this forum, there are a lot I misunderstood, this forum helped me a lot. There are many I will read on news today that are incorrect, this forum helped me a lot. Thanks to established members on this forum that helped me in bitcoin-use education process.

What did you think a paper wallet is?

I read this topic few hours ago and I replied to it not quite long, but some reputed members also posted there. With the thread's OP, and some other threads I have read before I noticed the old way that is used to generate paper wallet is what they stick to and not advancing anything when paper wallet has advanced beyond.

What is paper wallet
In my opinion, paper wallet are key(s) that you generated in which the backup is written on paper (laminated paper preferably), metallic sheet or something that is safe enough. But recently, the seed phrase that is backup can produce the keys and addresses needed which you can backup instead of the private key(s).

For instance, just like I generated paper wallet in the old way that single key and address will be generated, I can also prefer to use a HD wallet like Electrum or html file of Iancoleman on safe and secure open source airgapped device to generate a paper wallet. Using any of the two device, I can prefer to backup a child private key and its corresponding address, backup both on paper or metallic sheet. That also makes it a paper wallet. But I would not do that, because the seed phrase is easy to backup, 12 words are secure and safe enough, and I can use passphrase along (extended word) if I want. If I backup the seed phrase on paper or metallic sheet, it is still a paper wallet.

I do not like what people are terming as paper wallet, paper wallet is beyond the old way of generating it. HD wallets supports it. So far the generated wallet is deleted on the open source airgapped device after the seed phrase or private key is backup, then it is a paper wallet.

Your are right,let me shed more light on this,paper wallet is a kind of noncustodial cold storage that is you can have your  account secure on paper without being connected to the internet,that means no third party will have access to your wallet password,and this is seen as best way for those holding huge cryptocurrencies  because is safe,and its known as best storage before some other cold storage like gold standard came out.

[Welsh]

This is just a personal assumption, and isn't at all backed up by any data. However, my hunch would be that given enough time, the highest cause of loss of funds will be through death, illness, and neglecting thinking about themselves, instead of outside threats.

By all means, external threats should be considered with the upmost due diligence, however personal circumstances, and the potential of compromising your own ability to access should also be considered heavily during the generation, and how you handle it from them onward.

But I don't agree with the "over a particular age" part. Accidents do happen even to the young ones. Whether it's car or even more - motorcycle or bike accident, one may lose some memory. Also human mind tends to store/remember incorrectly various things from the past - the farther it is, the more inaccurate it may be. So no, even the young ones should be careful with that.

People hide your paper wallets from potential wrongdoers, but do it in a way somebody you trust can access it (in special circumstances) and use it for you if you - for any reason - are unable to.

You're absolutely right, accidents can happen. I didn't mean to exclusively say that only those of a particular age should be considering it, but rather putting an emphasis on those of a particular age that should probably be giving more thought into it.

However, I agree everyone should have some sort of contingency for accidents which might impair the person from accessing their funds. After all, you could have as much security from natural disasters, and physical theft all you want, but there's still an opening for loss of funds if you don't have a plan it something was to ever happen to yourself.  

Offline is the only way you should generate your paper wallets, but if you continue to store the wallets offline but digitally, then it's not a paper wallet; it's an airgapped wallet with a paper back up.

Again spot on, I should have been a little more clearer in both instances.

[Marvelman]

- generate a new seed phrase and wallet (as securely as possible)

Use an permanently airgapped device, running a live OS. I would suggest Tails from a bootable CD, as this has Electrum already installed and avoids the risk of data being written to a USB drive. Preferably physically remove the WiFi card and hard drive from your airgapped device. The potential downside to this (depending on your use case) is you would generate an Electrum seed phrase rather than a BIP39 seed phrase.

- store a paper backup in a safe location

Write down the seed phrase by hand rather than print it. Make sure you have more than one copy.

- use the xPub wallet key to create a watch-only wallet on my device
- generate a new address for each new deposit to protect my privacy

What software are you using to create a watch-only wallet? If ultimate privacy is your goal, then be aware that using a light wallet with a master public key will still expose all your addresses as belonging to the same wallet to whichever servers your light wallet connects to.

Last question - how would you plan to spend from this wallet?

Thanks for the tips. I am not aiming for ultimate privacy as such, I have no intention of doing anything illegal. I just don't want every withdrawal from the exchange to reveal my entire stock. Plausible deniability.

While I haven't thought about spending yet, I'll probably sweep the entire amount out of my wallet at once and won't use that wallet again.

[SquirrelJulietGarden]

What is paper wallet
In my opinion, paper wallet are key(s) that you generated in which the backup is written on paper (laminated paper preferably), metallic sheet or something that is safe enough. But recently, the seed phrase that is backup can produce the keys and addresses needed which you can backup instead of the private key(s).

Seed phrase or private key, it depends on each wallet you use. However they are only different visual displays of your wallet private key.

Like in computer science, rather than display 01 10 etc. for non-tech users, there are encryption and decryption process to convert computer science raw data to visual one for people to see and more easily to understand.

Same method goes for private key. It is easier to understand what seed phrase means by meaningful words rather than a lengthy private key. Also with seed phrase, if you lose one word or one or two letter because of missing writing or physical damage, you can check it with available resources and recover it. For private key, it is more complicated but also means private key is a better secured method to back up your wallet.