Knut Svanholm

@knut.svanholm

Paper Wallets

One of the most exciting things you can do with your Bitcoins is to send them to a piece of paper. It sounds sort of mundane but think about it for a while. Before Bitcoin you, the average citizen, couldn’t do this. Sure you could create a painting, write a book or compose a symphony and sell it but you couldn’t just take the fruits of your labor and funnel them into a QR-code. Now you can. The implications of this are huge. Hiding money under your mattress is actually a viable alternative to a bank vault now because inflation or regulation won’t suck the value out of it anymore. So how do you do it?

First of all, the first rule of crypto-club is:

Your keys — Your Bitcoin, Not your keys — Not your Bitcoin.

What you need to do to assure that you’re the one in control of your private keys is to follow these simple steps.

  • Create a Bitcoin address with a public and a private key offline
  • Print these keys offline
  • Erase any trace of the private key offline
  • Send Bitcoin to this newly created address

There are many ways of creating your own keys but arguably one of the best is to use an open source based web service such as www.bitaddress.org

Open source software can be trusted because anyone can review the code. You don’t have to know what every part of the code does because you can trust that someone does.

The same thing is true for your web browser as well.

  1. Download and install an open source web browser you don’t normally use such as https://www.mozilla.org/firefox/
  2. Go to www.bitaddress.org
  3. Go offline
  4. Create an address by moving your your mouse around
  5. Print a paper wallet offline. Make sure your printer is offline too or, if you’re really paranoid, write the keys down manually
  6. Erase your browser’s cache memory. This is where all the information about the website you just visited is stored temporarily, including that very secret key you just created. You can do this in from your settings menu in Firefox.
  7. Uninstall the browser and erase all files associated with it

It’s essential that you understand what each steps does and why you can trust each step of the process. There are even more bullet proof steps if you’re into conspiracy theories such as buying a dedicated computer and printer just for this purpose and running them over with a steamroller before you go online again but the method above should suffice if you know what you’re doing. The www.bitaddress.org website can create three different addresses for you from the same seed and you can easily check if they work by sending a small amount of Bitcoin to one of them to see if they work as intended.

After you’ve completed the steps above, scan the public key with the QR-code reader in your Bitcoin wallet on your phone. Make sure that your phone camera does not see the private key! Again, if you’re paranoid, just type the public key into your wallet. Most Bitcoin wallets can do this. Go online again and send Bitcoin to this address.

This address is now worth exactly what you sent to it in Bitcoin. This in turn means that you just assigned a specific value to the paper. As long as the paper isn’t compromised you own whatever amount you just sent to it. For example, if you made a paper wallet worth a 1000 US dollars on the 1st of February 2017 it would have 1 Bitcoin assigned to it. Change the date to the 1st of January 2011 and you would have had 3333 Bitcoins assigned to it.

Good luck!

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