Paper Wallet

A Paper Wallet, unlike a hardware or software wallet, is literally a physical piece of paper with your public and private keys written or printed on it or a piece of paper with your seed phrase copied to it.

The keys can also take the form of a QR code, instead of actual alphanumeric characters.

Paper wallets are just another form of cryptocurrency wallet that lets you store and access your cryptocurrency, but you’re doing it offline, not connected to the Internet.

Paper wallets are a form of cold storage, as your wallet is not connected to the Internet.

The benefit of a paper wallet is that because you are offline and not connected to the Internet, you’ve effectively taken away the exposure of your wallet to hackers and Internet exploits.

There’s no way for a hacker to hack your paper wallet unless they physically get their hands on it.

While that is a huge benefit, paper wallets also come with some drawbacks.

Mainly, if you lose your paper wallet and don’t have adequate backup and recovery procedures in place, there’s no way to gain access to your wallet in the future.

Your digital assets are lost forever.

It’s this fact – losing or damaging your paper wallet – that has made paper wallets less attractive as your primary or sole wallet of choice.

Paper wallets can be beneficial in a tiered approach to asset storage and safety, acting as another layer of protection to your assets as long as physical safety and storage of your paper wallet is planned out accordingly.

Related Terms

Desktop Wallet

A common type of crypto wallet used to securely store and manage your private keys on a computer hard drive. They’re considered more secure than web-based wallets, since you can only access them from wherever your computer is located, and again, you control your private keys.

Wallet

Made up of a unique public address called your public key (similar to your bank account number) that you can share with the world, your friends, family, and other businesses and companies that you trust, to send and receive digital assets. A wallet also stores a private key (much like the PIN that you use to access your bank account at the ATM), which, when combined with the public key, confirms ownership of the wallet, and allows you as the wallet owner to view the digital record of your wallet transactions, and allows you to perform actions such as buying, selling, withdrawing, and swapping funds.

Cold Wallet

Cold wallets are not connected to the Internet, providing added security over hot wallets. Cold wallets are not directly exposed to Internet security threats like hacks, phishing attempts, malware, viruses, and other attacks that could lead to the permanent loss of your cryptocurrencies and digital assets.

Cold Storage

Cold Storage is a short and long-term cryptocurrency storage solution that involves storing most or all of your cryptocurrency reserves offline. Forms of offline storage include a computer not connected to the Internet, hardware wallets like the Ledger Nano, a USB thumb drive that is kept in a safe or other secure location, on a piece of paper, or even on other physical items like an actual coin.

Hardware Wallet

A type of cryptocurrency wallet that’s based on a physical device, such as a USB thumb drive with buttons and a screen, that stores your private keys to your cryptocurrency funds. A hardware wallet is considered a cold wallet in that it isn’t connected to the Internet, keeping your wallet (and wallet funds) away from hackers and theft.