What is an Ethereum paper wallet?
A paper wallet a wallet you can generate for yourself, which can be held on a piece of paper. Paper wallets typically have two QR codes; one for the public key (wallet address that you get paid to), and one for the private key (what you use transferring ether to other people – like an Ethereum PIN number). This wallet is one of the most secure wallets as it keeps access to your ether completely offline and out of reach of hackers.
I thought Ethereum was a digital currency, how can it be stored on paper?
It can be confusing to learn that you can actually hold your ether on a piece of paper, but the logic behind it is pretty simple. Ether (the currency used on the Ethereum network) isn’t actually ‘stored’ in a wallet. Instead, Ethereum transactions are recorded on the blockchain’s public ledger, which is what proves who owns which coins. This means that the addresses of your wallet do not need to be stored online.
The private key and the public (wallet address) keys are what are needed to send and receive money in your wallet respectively, so all you need is the details of the two keys to access and transact with your ether. This makes it possible to generate the keys and print them on a piece of paper.
Basically a paper wallet is the Ethereum equivalent of replacing your bank card with a piece of paper that has your bank details and PIN number on it.
What other types of wallet are there?
There are four main alternative types of Ethereum wallets that you can consider. Here’s a summary of the differences between them:
- Online wallet. Also known as a web-based wallet, this is a wallet that allows you to access your ether via a web browser. The private key is usually hosted by your provider, and they are solely responsible for its security. Good examples of web-based Ethereum wallets are MyEtherWallet or Coinbase.
- Mobile wallet. This is similar to an online wallet, only that it’s stored on a native mobile phone application. Examples for mobile wallets include Jaxx, BRD, and Abra.
- Desktop wallet. This is effectively a wallet that you can download and install on your PC. It stores the private key on your computer, giving you control of your funds and their security. Examples of good desktop wallets include Exodus, Mist, and Electrum.
- Hardware wallet. This is an electronic device that’s specifically built to hold ether. It stores your private key completely offline, guaranteeing the maximum protection of your coins from online attacks. Some of the most widely-known manufacturers of these wallets include KeepKey, Trezor, and Ledger.
How is a paper wallet different to other wallets?
Just as the name suggests, this wallet is made of paper and not based on software or hardware as is the case with other wallets. And since it’s not connected to the internet access to your ether is kept completely offline, like with hardware wallets. But when it comes to functionality, it works similarly to other wallets. You use your wallet address to receive ether (even when you are offline) and your private key to send ether to other wallets.
Are Ethereum paper wallets secure?
Yes, Ethereum paper wallets are very secure. By definition, they are ‘cold wallets’ meaning that they store access to your ether completely offline, away from online interference. However, a paper wallet is only as safe as you keep it. If you keep it in a location that no one can access and where it won’t get damaged, you will have maximum security, whereas if you leave it out in the open your funds can be compromised or lost if the wallet is destroyed without a backup.
If I lose or damage my Ethereum paper wallet, are the coins retrievable?
Yes, but only if you wrote down a recovery seed (a string of words that can be used to recover your wallet; you can read more about recovery seeds in the ‘frequent questions’ section). If you didn’t record it, you won’t have access to your ether. Additionally, to be safe, ensure that you print several copies of the paper wallet and keep them in a safe, separate location which only you have access to.
Are payments from/to paper wallets anonymous?
Like transactions between other wallets, payments from/to paper wallets are completely anonymous. The blockchain records only the public key (wallet address) when you make a payment, and there’s no way to trace it back to a specific identity.
How do I make an Ethereum paper wallet?
It’s simple. Start by going to a wallet generator such as walletgenerator.net, hover your mouse around to generate a unique, random wallet address, and print out the wallet details from the results. If you prefer to do this completely offline, you can note down the keys generated by hand on a piece of paper and keep it safe. However, this means you won’t get the scannable QR codes for the wallet address.
What are the risks of making an Ethereum paper wallet?
Making Ethereum paper wallet comes with several risks. These are:
- Making a paper wallet from an untrustworthy site. An untrustworthy site may record your keys as you generate them, giving them access to your ether. Make sure you only use reputable sites that will deliver you a genuine, unique address.
- Losing your wallet/having it stolen. A paper wallet can easily be lost or stolen, especially if you haven’t kept it in a safe location. If either of this happens, it could mean you lose access to your coins completely. Always keep your wallet locked away in a safe place.
- Damaging your wallet. Paper is very fragile. It can easily get damaged, especially if it comes in contact with water. You have to be careful not to damage your wallet.
And what are the advantages?
Despite the risks, there are many reasons that paper wallets are a great way to store your ether. These include:
- Cold storage. Like hardware wallets, paper wallets keep your coins completely offline. This means that no hacker can gain access to your ether at any time.
- Much cheaper than hardware wallets. Unlike hard wallets that require you to buy the device for dozens of pounds, paper wallets are free. All you need is a piece of paper with which the details of your wallet will be printed on.
- Fun way to make your own wallet. These are the only wallets you can make yourself, something that can be fun for both tech enthusiasts and doable for novice users.
Should I use an Ethereum paper wallet?
It depends on your goals of buying ether. You see, if you are a long-term investor who intends on holding ether for investment purposes, then yes, a paper wallet would be a greatt choice. But if you intend to gain access to your wallet regularly or are just storing small amounts of ether, you might want to choose other options such as online and mobile wallets as they are more convenient.
Where can I go to make the best paper wallet?
You can find the best options right here. We have reviewed a number of reputable providers for you to pick a location where you can generate a paper wallet.