Difference between revisions of "Paper wallet"

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Storing [[Bitcoin]] savings in a paper wallet is one of the simplest ways to hold bitcoin securely, but you should follow some important steps and note some important points. The basic idea is simply to generate a new key pair (public address and private key) and send your coins to it. There are many ways to generate this key-pair, but ensure that you use a reputable program and that it can be run offline - if you're extra paranoid, you can even live boot a fresh OS and create the address from there so you know that there was definitely no mal-ware installed in your system at the time you created your address. Here's some steps you could use to create your paper wallet safely:
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Storing [[Crypto-currency]] in a paper wallet is one of the simplest ways to hold your savings securely, but you should follow some important steps to be sure that you can truly be confident in its security. A paper wallet is a way of keeping your assets safe by having the only way to access them written on a piece of paper so that they're safe against hackers, theft or mechanical failure. This procedure is a way of using the popular [https://exodus.io Exodus] multi-asset wallet software as a secure paper wallet consisting of a twelve word phrase which can secure any of the assets supported by Exodus.
  
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== Creating the wallet ==
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Since the twelve word phrase we create allows access to the savings within it, we want to be very certain that it has not been seen by any hackers or mal-ware, so it should be created and written down while the computer is offline, and further more should be created from within an operating system that has never been online before. To do this we'll be using a Linux operating system booted live from a USB stick.
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*Download an ISO file of your favourite Linux distro such as [http://linuxmint.com/ Linux Mint].
 
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*Ensure the checksum of the ISO you downloaded matches the one published on the site
 
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*Make a bootable USB stick or DVD from the ISO file
 
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*Go to [http://bitaddress.org bitaddress.org] and save the page onto another newly formatted USB stick
 
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*Unplug your computer from the network and reboot into the live OS on the DVD/USB stick (you're now running a perfectly clean system)
 
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*Locate the saved ''bitaddress.org'' page and open it (it will open in the default browser in offline mode)
 
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*Select "paper wallet" or "bulk wallet" depending on whether you'd like to store on paper or a USB stick etc
 
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*Select BIP38 encrypt if you want to further lock the key with a passphrase
 
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*Use the compressed version of the address since it uses less fees to transact with
 
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*Click generate to create your new address(es)
 
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*Print the information or store on your backup devices
 
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*Remove the media, reboot the machine normally, and then reconnect to the network
 
  
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You now have a public address with the corresponding private key that is guaranteed to be secret, the information does not exist anywhere except on your memory stick or paper (depending on the process you used). You can now send coins to the address any time without ever having to access your secret private key from it's safe location on the paper or memory stick.
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One small complication is that Exodus does not natively give access to the twelve word backup phrase until '''after''' some funds have been sent to the wallet. They've done it like this to make their backup procedure much more friendly and easy to follow safely for beginners, but it's no good for creating a secure paper wallet. Fortunately there's a simple way around this - any source of twelve word phrase will do, as long as they conform to the [https://github.com/bitcoin/bips/blob/master/bip-0039.mediawiki BIP-39] protocol.
  
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== Accessing the wallet ==
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== What you'll need ==
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All wallet software has the ability to import private keys which also contain the public key information. For example in the popular [https://electrum.org/ Electrum] wallet you go to the "wallet" menu then select "Sweep" from the "Private keys" option. This option removes all the coins from the paper wallet into a new address - this is the best thing to do because even removing just a tiny portion will [https://www.reddit.com/r/Bitcoin/comments/1c9xr7/psa_using_paper_wallets_understanding_change/ completely empty the paper wallet] with the remainder going into a new "change" address. You can use the bitaddress.org page again to unencrypted your private key and then paste it into the textbox in the Electrum window. Either select an existing address in the wallet or stick with its recommended new address for the coins from the private address to be sent to. You then click "broadcast" for the transfer to be actualised in the network. You may prefer to do the decrypting and sweeping procedure offline.
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*One USB stick with a bootable Linux such as [https://linuxmint.com Linux Mint] on it
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*Another USB stick with the latest [https://www.exodus.io/releases/ Exodus for Linux] on it, and also this [https://raw.githubusercontent.com/Coinomi/bip39/master/bip39-standalone.html standalone BIP-39 seed generator]
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*A pen and paper :-)
  
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Another issue confusing many people is the compressed/uncompressed addresses. They are not two representations of the same address, they're completely different addresses so when sending coin to one, you will not see those coins also show up in the other. You can use either address and you have control over both addresses because they both share the same private key. It's recommended to only use compressed addresses though because they use less fees to transact with since the fees are charged per-byte.
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== The procedure ==
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*Disconnect your computer from the network and reboot into the live Linux OS on the USB stick.
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*Insert the other USB stick and run both Exodus and the BIP-39 seed generator, and also open a text editor.
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*In the seed generator page, select 12 for the number of words and click "Generate", then write down the resulting twelve words and also select them and CTRL+C them ready to paste.
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*In Exodus click "restore from 12 word phrase", it will then restart and allow you to paste the twelve words in that you copied in the previous step.
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*Wait for the recovery to complete which may take about five minutes (even though we're offline, it still takes a while since it keeps trying to connect).
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*Select "wallet", go to all the asset types you care about and paste their receive addresses into the text editor you opened (noting down what asset type each address is).
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*Save the text in the text editor to a file on the USB stick.
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*Remove the bootable USB, reboot into your normal OS and reconnect the net.
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*That's it! You can now send assets to the addresses you noted down.
  
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'''To summarise:''' The easiest and most reliable way to spend from your wallet is to import the whole thing into a normal wallet such as Electrum or Exodus and then spend any amount of money in the usual way, and then create a new paper wallet and send any remaining amount you like into the new wallet.
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== Accessing the assets ==
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To access the coins, you simply run Exodus and recover from the twelve word phrase - but note that you would have then compromised the security of your paper wallet, so it would be best to create another one and send the remaining funds to it.
  
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== Notes ==
 
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*If you use a BIP32 (12 word phrase) based wallet then the problem of change addresses is avoided
 
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*You can use [http://myetherwallet.com/ MyEtherWallet] the same way to store your ETH and ERC20 tokens, it works offline as it's all client side JavaScript
 
 
[[Category:Cryptocurrency]]
 
[[Category:Cryptocurrency]]

Revision as of 00:41, 10 May 2018

Storing Crypto-currency in a paper wallet is one of the simplest ways to hold your savings securely, but you should follow some important steps to be sure that you can truly be confident in its security. A paper wallet is a way of keeping your assets safe by having the only way to access them written on a piece of paper so that they're safe against hackers, theft or mechanical failure. This procedure is a way of using the popular Exodus multi-asset wallet software as a secure paper wallet consisting of a twelve word phrase which can secure any of the assets supported by Exodus.

Since the twelve word phrase we create allows access to the savings within it, we want to be very certain that it has not been seen by any hackers or mal-ware, so it should be created and written down while the computer is offline, and further more should be created from within an operating system that has never been online before. To do this we'll be using a Linux operating system booted live from a USB stick.

One small complication is that Exodus does not natively give access to the twelve word backup phrase until after some funds have been sent to the wallet. They've done it like this to make their backup procedure much more friendly and easy to follow safely for beginners, but it's no good for creating a secure paper wallet. Fortunately there's a simple way around this - any source of twelve word phrase will do, as long as they conform to the BIP-39 protocol.

What you'll need

The procedure

  • Disconnect your computer from the network and reboot into the live Linux OS on the USB stick.
  • Insert the other USB stick and run both Exodus and the BIP-39 seed generator, and also open a text editor.
  • In the seed generator page, select 12 for the number of words and click "Generate", then write down the resulting twelve words and also select them and CTRL+C them ready to paste.
  • In Exodus click "restore from 12 word phrase", it will then restart and allow you to paste the twelve words in that you copied in the previous step.
  • Wait for the recovery to complete which may take about five minutes (even though we're offline, it still takes a while since it keeps trying to connect).
  • Select "wallet", go to all the asset types you care about and paste their receive addresses into the text editor you opened (noting down what asset type each address is).
  • Save the text in the text editor to a file on the USB stick.
  • Remove the bootable USB, reboot into your normal OS and reconnect the net.
  • That's it! You can now send assets to the addresses you noted down.

Accessing the assets

To access the coins, you simply run Exodus and recover from the twelve word phrase - but note that you would have then compromised the security of your paper wallet, so it would be best to create another one and send the remaining funds to it.

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