Paper Wallet

A paper wallet is a physical document, usually a sheet of paper, on which a cryptocurrency private key and its matching public address are printed or written, often alongside QR codes for easy scanning. Coins are sent to the address and stay on the blockchain; whoever holds the paper holds the key needed to spend them. Paper wallets were a popular form of cold storage in the early years of Bitcoin, because they kept keys entirely away from internet-connected devices.

Since the late 2010s, most security guides have advised against new paper wallets in the classic single-key form. They have been replaced by hardware wallets and by written backups of a seed phrase, which is itself a kind of paper record but one that restores a whole wallet rather than a single address. The term is still common, and many older paper wallets hold coins today.

A paper wallet is like writing the combination of a safe on a card and locking the card in a drawer. The money is not in the drawer; it is in the safe, which in this case is the blockchain. But anyone who finds the card can open the safe, and if the card is burned, the money is locked away for good.

Its appeal was simplicity. There is no battery to fail, no software to hack and no company to trust. Its weakness is that paper is fragile and people make mistakes when they finally come to spend the coins.

1. Generation. A key pair is created by software, ideally on a computer that has never been and will never be connected to the internet, across an air gap.
2. Printing. The private key and the wallet address are printed, often as text and as a QR code.
3. Funding. Coins are sent to the printed address. Anyone can check the balance on a blockchain explorer without exposing the key.
4. Spending. To use the funds, the owner imports or, more safely, sweeps the private key into a software or hardware wallet, which moves the entire balance to a new address in one transaction.

• Compromised generation. Keys created on an infected computer or on a malicious website can be copied by attackers before the paper is ever printed. Fake paper wallet generators have been used to steal funds.
• Printers and copies. Networked printers may keep copies of documents in memory, and photographs or scans of the paper defeat its offline purpose.
• Physical damage and loss. Fire, water, fading ink or simply forgetting where the paper is stored can make the coins permanently unspendable.
• Partial spending. In Bitcoin, sending only part of a paper wallet's balance with older software could route the remainder to a hidden change address controlled by the software, leaving the paper empty. Sweeping the full balance avoids this.
• Address reuse. Each paper wallet usually holds one address, so repeated deposits weaken privacy.

Hierarchical deterministic wallets, which derive many addresses from one seed, made single-key backups awkward, and modern formats and features, such as SegWit addresses and multi-signature set-ups, are poorly suited to one-sheet storage. Hardware wallets offer offline key storage with a screen to verify transactions, reducing the chance of user error. Many paper-wallet tools are no longer maintained, and running old code carries its own risk. For durability, some holders now engrave seed phrases on metal plates instead.

People who find a paper wallet from the early 2010s are usually advised to check the address on an explorer first, without typing the private key into any website. If it holds funds, the key can be swept into a current, reputable wallet installed from the developer's official source, ideally a hardware wallet, so the whole balance moves to a fresh address in one step. Coins created at the time of later chain splits, such as Bitcoin Cash in 2017, may also be claimable with the same key, but only after the main balance has been secured. Holders should be wary of "recovery services" that ask for the key, a common route to theft.

Paper wallets share ideas with collectible physical bitcoins, which embed a private key under a tamper-evident seal, and with "brain wallets", where a key is derived from a memorised phrase, a method that proved highly insecure because attackers could guess common phrases. All three illustrate the same principle: whoever controls the key controls the coins, which is why custody decisions matter as much as the choice of coin.