Unarguably, offline or cold storage wallets are the best for storing cryptocurrencies. The reason isn’t far fetched, since they are not connected to the internet, they are less susceptible to attacks. On that note, the benefits of storing your cryptocurrencies offline (in this case a paper wallet) makes learning how to receive and spend Bitcoins using a paper wallet a must.
What is a Paper Wallet?
A paper wallet is an offline storage for storing your cryptocurrencies. Usually, a wallet of this nature is created with an open-source wallet generator that produces a random public address and private key to a wallet. While the public address enables you to receive cryptocurrencies, the private key allows you to access the wallet and spend its funds.
What's more, the details of the wallet can be printed on paper, plastic, or any other device the user deems fit. The paper is then kept away in a safe location to ensure its safety.
Is it Safe to Use a Paper Wallet?
A paper wallet can be created without an internet connection; hence, neither can the website creating it nor a third party access details of the wallet. The risk of malware or cyber attack is low. However, the paper's means of storage is entirely up to the user, unlike other cryptocurrency wallets that are linked to third-party platforms. As a result, paper wallets are one of the safest means of storing cryptocurrency.
How to Create a Paper Wallet
If you do not have a paper wallet before this time, follow the steps below to create one:
- Go to https://walletgenerator.net/
- Turn off your internet connection
- Move your cursor around the interface until the value changes to 0
- Next, you will be redirected to a page with your newly created wallet.
Print the wallet's details and do not save it on an online editor, notepad, or your computer. The aim is to ensure that your wallet's private key is no way accessible over the internet.
How to Receive Bitcoin Using a Paper Wallet
You don’t need to be a tech geek to receive Bitcoin using a paper wallet. Just follow the steps below:
- Have your paper wallet with you
- Where it is written 'Public Address' or 'Public Key,' that's the address you need to give to the sender. However, you must be careful in typing this string of alphanumeric characters. A wrongly typed Public Address means you receive nothing, while the sender may lose his funds forever.
- Alternatively, you can scan the public address's QR code to avoid any mistakes using a mobile wallet.
How to know when your bitcoin has arrived
- Head to Blockchain.info
- Type out carefully the public address of your wallet in the search bar and search. Transactions on your wallet with regards to their dates, times, and the amounts will be visible.
How to Send Bitcoin from a Paper Wallet
Sending or spending Bitcoin from a paper wallet may be a bit tricky, but it's quite easy once you get the big picture. First off, you need the following to transfer Bitcoin to any wallet's address:
- A smartphone or computer with an internet connection
- A software wallet such as MyCelium, Electrum, etc.
Once these two are in place:
- You need to manually type or scan the QR code of your wallet's private key in the software wallet
- Transfer the exact amount you want to send to the recipient.
Let's break each element down.
In this example, we'll be using the MyCelium Wallet. It's a mobile Bitcoin wallet that enables you to import a wallet's private key to access its funds and make a transaction.
- Go to https://wallet.mycelium.com/
- Select the hamburger icon
- Click on the 'Download' menu
- Choose the Mycelium Wallet app that is compatible with your smartphone's OS (e.g. Android or iOS)
- For Android users, select the Google Play store option
- Download and install the wallet on your phone
- On launching MyCelium, you'll be prompted to either restore an existing wallet or create a new wallet
- Choose the option 'Create a new wallet.'
- Next, click on the dotted menu button and choose 'Cold Storage.'
You can scan the QR code of the private key of the Bitcoin wallet you want to send funds from or manually type the key. Since it's easier to scan than type, we will use the QR Code method.
- Click on 'QR Code'
- Place your phone's camera close to the private key on your paper wallet
- Your wallet's funds will be visible after scanning
- Select an address from your wallet which you want to send funds, enter the amount in BTC, and make a transfer
- The transfer should take a couple of minutes.
When done, you are free to delete the MyCelium wallet app on your mobile device. However, you'll need to initiate the process highlighted above all over again. It's better safe than sorry.