Post
Topic
Board Bitcoin Discussion
Merits 1 from 1 user
Re: Paper wallets best practices
by
pooya87
on 06/07/2019, 02:46:16 UTC
⭐ Merited by Baofeng (1)
lets split the whole process into 3 groups/steps:
1. creation
the first thing to do is to create the paper wallet correctly so that you are not leaking anything in this step. for that you should start by choosing a good tool and for that you first have to decide whether you want to store a single key or a seed.
if it is a single key (the most common form of paper wallet) then you can use any trusted wallet that allows you to export the private keys. you can also use specialized tools such as bitaddress.
if it is seed then your choice is limited to the HD wallets such as Electrum.

then you have to download this "tool" and verify its authenticity. this is usually done with a PGP signature.

and the final step is to run it and generate your key(s). in this case you want to choose a clean environment to do that. the best way to do it is using a live linux with network physically disabled.

2. printing
using seed words helps in this case since you wouldn't need a printer, in case you don't own one or are worried about printer memory. you can write down phrases on paper easier than random characters of a private key.
using encryption in this case is encouraged. it prevents someone from physically stealing your coins since they would need the password but then you will have to create a back up of that password too. using encryption also solves the problem with printers if the password was strong and the encryption was a good one (such as BIP38 or simply using AES-256).

3. storage
you choose paper wallets when you want to store a key for long term so you have to store it in a way that it is not damaged in long term and stays safe. choosing the material to "print" the key on is important in this case.
for very long periods, metal is the best choice because of its durability. there are projects that sell ready to use metallic letters designed to be used for bitcoin paper wallets. or you can use an old fashioned chisel an a plate.
paper is the most common and cheapest option. but its durability is limited, it can however be increased by using good material and laminating it. (encryption helps in this case if you don't want to buy a laminating machine).
digitally storing a paper wallet (storing on a USB disk) is discouraged because digital storage is always at risk of being hacked and leaking your key and also for "storage" they are not durable.

[optional]4. testing
i always suggest that when you create something like a paper wallet, you test it. for example you can do all of the above and send a small amount to the wallet you created. then after confirmation sweep that key and spend that amount.
this way you will eliminate any possible mistakes that you might have made in any of the above steps and it can give you a good idea of how things should work. then throw away this test key and create a new one for real usage.