Welcome to Blockgeeks
With Bitcoin , Ethereum, and a host of other cryptocurrencies once again making headlines following an incredibly bullish year, crypto security has never been more important, this guide will teach you how to protect your cryptocurrency with a paper wallet and cold storage.
If you are looking to learn more about the technical side of cryptocurrencies and how they work please check out our blockchain courses. A cryptocurrency wallet is a digital wallet that you can use to store, send and receive various cryptocurrencies. Instead, it saves your public and private keys which in turn helps you send and receive money.
Imagine a vending machine. Can anyone and put their money inside the machine right? The only person who can take out the money is the owner of the machine who has the key. In this example, the vending machine is the public address which anyone uses to send money to you.
You are the machine owner, and the key that he is carrying is your private key. Using this private key only you can access your money and do what you please with it.
The public key is the address that anyone can use to send you the money, while the private key is what you will use to send money to anyone else. Remember, ONLY you should know what your private key is, otherwise anyone can use your wallet to send your money to any other addresses. Under no circumstances should you ever lose your private key.
You should use at least two different techniques to save and store your private keys. We will discuss these various techniques a little later in the article. Hot storage is like the wallets that you carry around in your pocket. The Cold storage is somewhat akin to your savings bank account. Keep this distinction in mind as we move forward. If you want to use your currency frequently then you must use hot storage. On the other hand, if you want to store your money for a long time then you must use cold storage.
Hot storage, in simple terms, is when you keep your cryptocurrency in a device which is directly connected to the internet. You should think of exchange wallets, desktop clients, and mobile wallets any wallet that exists on a device that will ever connect to the internet as a hot wallet.
Think of it like fiat government issued currency. You might walk around with a portion of your wealth in a wallet for convenience but the majority you keep secured away. Your hot wallet should behave in the same way as a real-world wallet. You use it to carry a small amount of cash for ease of access. That is all. While transacting with hot wallets is very simple, there is a huge drawback when it comes to them. They are easily hackable. Recent ransomware attacks and previous compromises of large exchanges should be sufficient beacons to newcomers.
With your private key, and seed phrase intact, you should be able to restore any wallet painlessly enough. These wallets are the easiest to use among all. Furthermore, you can access this wallet from any server or any device in the world as long as it is connected to the net. Having said that, there is one big problem when it comes to online wallets. Your private key is going to be saved on another server.
This is basically like serving up your key to hackers on a silver platter. Do NOT use online wallets to store huge amounts of your money. Store the bare minimum that you need for exchange purposes. Desktop or mobile wallets are also popular choices for a hot wallet. These represent a much better option in terms of security. Desktop wallets are downloaded and installed on a single PC or laptop and they are only accessible from that one device where it was downloaded.
While it is a safer alternative than an online wallet, it can still be very inconvenient because you will not get access to your money unless you are on the device from which you downloaded the wallet. MultiBit and Armory are great examples of desktop wallets. Mobile wallets are pretty convenient to use because all you need to do is to download an app into your phone.
MyCelium is a really popular app for both Android and iPhone that people use for their mobile wallets, CoPay is a great option as well. A hacker can easily put Trojans in your system to phish for your details. Apart from that, you can easily lose your cryptos if your desktop or mobile is damaged. The easiest way of understanding how a multi-signature multi-sig wallet works like is by thinking of a safe which needs multiple keys to operate.
A multi-signature wallet is great for 2 purposes:. How does multi-signature wallet save you from human error? They issue 3 private keys. So even if you have a hacker behind you, it will super difficult for them to get their hands on 2 private keys.
And on top of that, even if you lose your private key for whatever reason, you still have that backup key that you had given to your friend. Now, how does a multi-signature wallet create a more democratic environment? Imagine that you are working in a company with 10 people and you need 8 approvals in order to make a transaction. Using a software like Electrum you can simply create a custom multi-sig wallet with 10 keys.
This way you can make seamless democratic transactions in your company. Even with all its amazing features, at the end of the day, a multi-signature wallet is still a hot wallet so you must use it economically. The Bitfinex hack more on it in a bit happened despite the fact that it had multi-signature security.
Plus, at the end of the day, the company whose wallet you are using still has one of the private keys. It completely depends on their ethics as to what they can do or not do to your funds. Different hot wallets carry different security risks. The least secure are undoubtedly those hosted on Exchange sites.
They hold your private keys, and they ward off daily attacks. Exchanges are a huge target for criminals because they store a lot of value. The Bitfinex hack is a great example of the dangers of hot storage. In early August , the folks at Bitfinex noticed that several of their security measures were being compromised. So what do you do to your cryptocurrency to keep it safe from malicious attacks like this? You use cold storage. For those seeking the most secure form of storage, cold wallets are the way to go.
Given the amount of attention that cryptocurrency has been receiving over the last few years, it has unfortunately piqued the interest of attackers. What are hardware and paper wallets? You will get to know about it in a minute. Hardware wallets are physical devices where you can store your cryptocurrency. They come in a few forms but the most common is the USB stick style typified by the Nano Ledger series. Although many swear by them, hardware wallets are still prone to compromise.
This applies to those bought from the company themselves, but particularly if a hardware wallet has been acquired second hand. Under no circumstances should anyone ever use a pre-owned hardware wallet. Although loss or damage can spell disaster for the unprepared, hardware wallets can be restored. You should keep restoration details in a safe place that only you, and anyone you plan to leave the money to know about.
Remember, your restoration details open the wallet. Think very carefully about who if anyone you share them with. Without a doubt, the safest way to store any cryptocurrency is using a paper wallet. By following a few pointers below, you can set one up entirely for free. Of course, this means that keeping a record of them is even more important.
To keep it very simple, paper wallets are an offline cold storage method of saving cryptocurrency. It includes printing out your public and private keys on a piece of paper which you then store and save in a secure place.
The keys are printed in the form of QR codes which you can scan in the future for all your transactions. The reason why it is so safe is that it gives complete control to you, the user. You do not need to worry about the well-being of a piece of hardware, nor do you have to worry about hackers or any piece of malware. You just need to take care of a piece of paper.
The answer to this question will largely depend on your circumstances. Paper wallets are formed by using a program to randomly generate a public and private key. The keys will be unique, and the program that generates them is open source. Those with advanced knowledge of coding can check the backend of the program themselves for randomicity in results.
This eradicates the exposure to online threats, and deleting the simple program after use will destroy any trace of them. All you do need is a computer, an internet connection, something to record your keys on. Now if you notice the list of cryptocurrencies supported by walletgenerator, you will see that Ethereum is missing from the list.
So, what do you need to do to create a paper wallet for Ethereum?
Simple Hardware Solutions
With BitcoinEthereum, and a host of other cryptocurrencies once again making headlines following an incredibly bullish year, crypto security has never been more important, this guide will teach you how to protect your cryptocurrency with a paper wallet and cold storage. If you are looking to learn more about the technical side of cryptocurrencies and how they work please check out our blockchain courses. A cryptocurrency wallet is a digital wallet that you can use to store, send and receive various cryptocurrencies. Instead, it saves your public and private keys which in turn helps you send and receive money. Imagine a vending machine. Can anyone and put their money inside the machine right? The only person who can take out the money is the owner of the machine who has the key.
Join Bitcoin Community
If you are new to cryptos, this guide is your shortcut to understanding what a cryptocurrency wallet is, how they work and which one suits you best. Some wallets are designed to hold only one type of coins, while others support multiple coins, which is very handy if you don't want to limit yourself to a single asset. Some wallets have other features, such as checking live exchange rates to your fiat currency of choice. Cryptocurrency wallet is fundamentally different from a standard "pocket" wallet as there are no coins there at all. Actually, digital coins are not stored anywhere at all as they don't physically exist. Instead, we have records of transactions stored on blockchain , and cryptocurrency wallet can interact with and analyze those blockchains to let you perform operations with your assets. It looks more like an Internet banking with a digital key.
One of the safest and popular ways of keeping your digital assets safe and sound is by using something called a paper wallet. In this article, we will explain how to transfer all your cryptocurrency into paper form by using a printer. Most cryptocurrencies crypttocurrency be stored in paper form, including Litecoin and Ethereum. However, in this guide, we will be covering the specifics behind keeping a paper bitcoin wallet.
Essentially, any bitcoin wallet is composed of two keys. One of the keys is public and one of them is private. The public key is your public wallet address and it is through this public address that others can send bitcoins to you from any part cryptocurrncy the world.
The private key is crytpocurrency allows you to send bitcoins to the wallets of other individuals from yours. It is the combination of both these keys that allow for cryptocurrebcy safe cryptocurrency transaction between people.
Remember that if anybody else obtains your private key, then they can steal all your funds. It would be similar to handing someone your credit card information. Users who keep cryptocurrehcy cryptocurrencies in online wallets or hard drive wallets, like USBs, consistently expose themselves to the risk of hacking, viruses, and keyloggers cryptkcurrency can potentially steal all their cryptocurrencies, forcing users to kiss their digital assets goodbye.
The first step to creating a physical paper bitcoin wallet is to generate a unique bitcoin address. This can be done through your web browser by visiting BitAddress. The website is entirely self-explanatory; it papre a key for you. For additional stors, users can further complicate their address by following the information provided on BitAddress, such as moving your mouse cursor around the screen.
After completing this process, users will be presented with their public and private keys, as well as their QR codes. It is ill advised to scan any of this information. Under this tab, users can select the number of addresses that they would like to generate. Your web browser will prompt you to select the printer of your choice.
Certain browsers, like Google Chrome, may allow you to save your wallet address conveniently as a pdf file for later cryphocurrency. Those familiar with the blockchain. All you would have to do is find ang paper wallet link button in the left-hand menu.
There are many other platforms and websites that allow users to create paper wallets. Certain websites are much more sophisticated than others, such as bitcoinpaperwallet. Bitcoinpaperwallet allows users to create tamper-resistant designs for their paper bitcoin wallets. Additionally, holographic labeling may also be used to show that the wallet is tamper free, in addition to other various perks. Users should always take serious precautions to ensure that papr paper bitcoin sallet are safe, especially if these wallets are used to store a substantial amount of digital assets.
Important: If you are storing large amounts of cryptocurrencies, we highly recommend you use a Hardware wallet such as a Cryptocurrfncy or Ledger — take a look at our full guide to both devices.
Make sure that nobody sees you creating your paper wallet. Unwanted viewers may copy all your keys and steal your funds, leaving you completely perplexed as to how your funds were stolen. BitAddress and LiteAddress allow users to enable two-factor authentication, providing for greatly improved overall wallet security. To avoid the risks of catching any spyware or keyloggers that could be used to snoop through all your activity, users should use a cryptocrurency and clean operating.
Ubuntu is highly recommended for a virus- and malware-free experience. Once you create and set up your paper wallet through any cryptocufrency, the website code should be able to run offline.
To ensure your safety and privacy, disable your internet connection before generating public and private keys. Individuals are also advised to store their paper wallets in a sealed compartment to avoid getting the paper wallet wet and damaged.
Users have also laminated their paper wallets to ensure protection from the elements. Safes provide a great amount of security wallet severely reduce the risk of howw stealing your physical bitcoin wallet. So, if you have a safe in your possession, we highly advise that you store your wallet. It is also not uncommon for users to entrust their paper wallets to solicitors, or individuals who you could trust with your will, testament, and other critical paer.
Users have also stored their paper wallets in deposit boxes. Have no fear; creating a paper wallet for altcoins and less used coins is possible. Users should keep in mind that every single altcoin carries a variation of the Crjptocurrency wallet application. After completing these steps, the console should display the private key associated with that wallet. Therefore, you will not have access to the private and public keys of sttore needed wallet.
Users can print these codes or select to generate QR codes for printing. Keep in mind that pertinent wallet details will be on your computer after carrying out this process. However, you should make sure that no assets are stored in the wallets that you are attempting to delete from your personal computer to avoid a total loss of funds. Congratulations, following the instructions provided in this article, you should now be in ayn of a truly unhackable paper wallet for your cryptocurrency storing needs!
No Spam. All content on Blockonomi. The paepr expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate.
I wallt lost password for blockchain. It just dont work anymore! I got saved btc adresses and exact amout of btc on them! Can I somehow do something to get access to my btcs? Thank you!!! Do you have your 12 word recovery seed? What none says is can all coins and tokens be stored using bitaddress.
I need to store tokens and coin. Whats the deal? How do I do this? Everyone says store your bitcoin its simple go here! Ok so I can store my bitcoin but what else? Sorry you may think its easy but us learners do not. You old hand crytpo people bypass information. Silly me. I thought a wallet would hold all kinds of money.
I bought uow Trezor and sent maid to it. They are still in the ether. Reading your article it is still not clear that there may be a wallet that can store every coin you can buy. What does a newbie do? Trezor did not make it clear that I could only store bitcoin and ether on it. How many wallets would need to be created for a random trader? Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email.
You should consider whether you can afford to take the high risk of losing your money. Related Articles. Show comments Hide comments. Oliver Dale November 7, at am. Larry December 5, at am. Robert Henry February 26, at am. Leave a reply Cancel reply Your email address will not be published.