Most are saying that if you hold big amount BTC you choose paper wallet. what is the reason behind that? and just want to know if i keep small amount BTC on paper wallet , what is the disadvantage?
The big disadvantage is that it may not be properly setup or the keys and addresses may not be properly generated, example are people that uses bitcoin ATM machine to generate a paper wallet, or a newbie that just use bitaddress to generate a paper wallet on the website (bitaddress.org) directly, some people may generate paper wallet on a website online which make it an online wallet, not offline wallet.
Paper wallet supposed to be an offline wallet, using the source code of paper wallet site like bitaddress to generate it on an airgapped devices, or using iancoleman or wallet like Electrum to generate the wallet on airgapped device.
A paper wallet requires you to keep it in a safe place that nobody else has access too. By default the most popular paper wallet generators have the private key printed on the wallet so if anybody finds it they will be able to steal your BTC.
Not only paper wallet, other wallets too. People backul their wallet seed phrase on paper, laminated paper or metallic sheet which can be stolen if not properly put in safe locations. If you buy a hardware wallet, the backups for seed phrase are still paper, or you get yourself a metallic sheet which still do not mitigate the risk of such offline attack.
You can use BIP38 passphrase (encryption) s an additional security if generated on sites like bitaddress, or use passphrase or extended word to use a seed phrase to generate different keys and addresses on HD wallet so that only you that know the psshrase or extended work can access your coins.
There is also a possibility that the ink will fade or the paper will deteriorate and you will lose access to your funds.
The backup can be on metallic sheet, it does not necessarily mean the backup should be on paper.
- It still has to be connected to another online wallet to use bitcoin.
It depends.
Safest wallet and method to sweep a paper walletMost Secure Method To Sweep Paper WalletAs long as you can create a watch-only wallet on an online device to create unsigned transaction (PSBT) and signing it on an airgapped device and broadcasted on the watch-only wallet, you can use it to spend some coins or the coins on a paper wallet without connecting the seed phrase or private key online.
Hardware wallets are best if you can have money to buy.
How? Why? Although, hardware wallets are good for people that do not know much about how to setup and use wallet on an airgapped device.