Paper wallet

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Revision as of 01:23, 13 May 2018 by Nad (talk | contribs)

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.

There is a protocol called BIP-39 which many wallets such as Electrum, Coinomi or Exodus use so that all the addresses they use along with their private keys are generated from single seed phrase. This seed can generate any number of addresses for across most different types of cryptos. Coinomi have released an open source standalone BIP-39 seed generator that allows you to generate BIP-39 phrases and to see the addresses associated with the phrases. Just save the tool (by right-clicking the "raw" button and selecting "save link as") and the run it in you browser. Select the number of words (usually 12 for most wallets) and then you can select different coins and check their addresses from the bottom of the page.

To make a really good paper wallet that you can be confident storing your savings in you should do this generation phase offline, and do it from a trust-worthy (open source) operating system that has itself never been online either. This can be done by disconnecting your computer and rebooting it into a clean Linux operating system on a USB stick, then running the BIP-39 tool, writing down the phrase and saving the relevant addresses on the USB stick.

Here's a method specifically tailored for the popular Exodus wallet which uses their "Safe backup report" so you can track the paper wallet balances as you send your savings to it.

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).
  • Open the developer menu (CTRL+SHIFT+D) and select "Export Safe Report Data". The Safe Report is a read-only backup you can use to check on your savings safely
  • Save the text in the text editor to a file on the USB stick, and copy the Safe Report from the exports folder on the desktop to the USB stick as well.
  • 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 check the balances of the coins in a safe read-only way you can run Exodus and import the safe-report zip file you exported, note that this will over-right any existing data in Exodus. The safe report allows you to easily keep track of the balances of all the assets in your paper wallet, and even to obtain public addresses of other assets in the same wallet you may wish to send coins to that you didn't initially make a note of.

To spend the coins, you'll need to run Exodus and recover from the twelve word phrase - but note that you would have then compromised the security of your paper wallet, so once you do this it would be best to create another paper wallet and send the remaining funds to it.

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