What Is Paper Wallet?

Investors in the cryptocurrency market utilize paper wallets, which are physical documents containing printed-out private and public keys. Some paper wallets may also include a scannable barcode generated by a dedicated app. These wallets enable investors to store and access their cryptocurrency offline. Upon printing their keys, the cryptocurrency tokens remain within the network, but they become inaccessible without the corresponding keys. Now, you can answer the question: “What is paper wallet?”

Pros of Paper Wallet

This isolation from the internet renders them impervious to online hacking attempts, making them one of the most secure methods for storing cryptocurrency.

Cons of Paper Wallet

Firstly, paper wallets are susceptible to physical damage. Damage from sources such as water, fire, tearing, and fading can easily destroy the paper, resulting in inaccessible cryptocurrency.

Secondly, paper wallets are prone to loss or misplacement. Losing the paper wallet means losing the private key and, consequently, the ability to access the stored cryptocurrency.

Thirdly, paper wallets lack the functionality for frequent transactions. Importing the private key into a software or hardware wallet for each transaction is inconvenient and time-consuming.

Lastly, paper wallets offer no built-in backup or recovery mechanisms. In the event of losing the paper wallet or corrupting the private keys, there is no way to retrieve the funds.

While paper wallets can be an effective option for long-term cryptocurrency storage, their limitations necessitate meticulous attention and the implementation of adequate backup and recovery measures. For those seeking a secure and convenient storage option, other types of wallets, such as hardware wallets, may be more suitable.

Conclusion

Paper wallets are a good option for storing large amounts of cryptocurrency. However, you should be aware of the risks involved before you create one.