your question title is missing one key word and that is "correctly". otherwise you can use a paper wallet any way you like and you don't "need to do" anything special. the correct way however is what you quoted.
here is the deal with paper wallets. they are for "cold storage" and a cold storage is considered safe as long as it remains "cold" that is not connected to the internet ever. so when you import that key in a wallet to spend some of its balance, you can no longer consider it "cold". from that moment on, you have a piece of paper that has a hot wallet's key printed on it. and you will lose the additional high level of security that paper wallet or cold storage was offering you.
to solve that, you first use paper wallets for "storage" (meaning when you want to keep the coins for long period of time like a year+) and always create a new paper wallet when you want spend from the old one so that you can send the change to that new one and still remain secure.
p.s. you don't have to pay fees twice, you just create one transaction with 2 outputs: paying the receiver + change sent to new paper wallet.
Topic: How to use paper wallet? (Read 179 times)
The lines I quoted are from Mastering Bitcoin. An I have heard that this book is like Bible for understanding Basis. It says that the private key will be compromised.
Read the quote again:Quote
if the computer you use to sign the transaction is compromised, you risk exposing the private key.
If you import your paper wallet private-key into a compromised PC (for the sake of spending your coins), you risk your private-key (because your PC is compromised).
BUT.... that's just an situation that has nothing to do with the "paper wallet" method itself and should not happen if you do things right:
a) don't get your PC compromised;
b) even better, import your paper wallet to an airgapped device - which is more complicated for newbies - but way safer.
If transferring all funds every-time is required.
Not required, but strongly encouraged because paper wallet is more suitable as cold wallet.
If I forget to transfer the remaining funds to other address can it be easily hacked?
No. The risks of your private key is exposed by stealing paper wallet is still same
Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
Paper wallet usually only have an address
How fixable is it to use paper wallet in this case?
Zero, if you use it like regular wallet.
The lines I quoted are from Mastering Bitcoin. An I have heard that this book is like Bible for understanding Basis. It says that the private key will be compromised.
no, a paper wallet is mostly designed to be imported into an electronic wallet that does all the change addressing and all that automatically
if you import your original paper wallet onto your electronic wallet, whether it be an app, a trezor, or what have you, you can still perpetually keep adding funds to your paper wallet address and you will never even know that every time you SEND from that address, under the hood of your wallet software, it is making new change address.
this is a normal function of the bitcoin software
if you don't trust the software (electronic wallet) then don't use it... if you fear your keys being compromised, it means the entire infrastructure that uses your wallet version is also compromised
all in all, the "How to use paper wallet?" question can be answered simply "deposit funds to address, import wallet onto electronic wallet software" and that is it!
if you import your original paper wallet onto your electronic wallet, whether it be an app, a trezor, or what have you, you can still perpetually keep adding funds to your paper wallet address and you will never even know that every time you SEND from that address, under the hood of your wallet software, it is making new change address.
this is a normal function of the bitcoin software
if you don't trust the software (electronic wallet) then don't use it... if you fear your keys being compromised, it means the entire infrastructure that uses your wallet version is also compromised
all in all, the "How to use paper wallet?" question can be answered simply "deposit funds to address, import wallet onto electronic wallet software" and that is it!
I read the below lines and a bit confused. Please help:
If transferring all funds every-time is required. Then, if I want to transfer X amount of funds to someone then I need to transfer the remaining funds to some other address. That means I am paying transaction fee twice.
If I forget to transfer the remaining funds to other address can it be easily hacked?
Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
How fixable is it to use paper wallet in this case?
Paper wallet is nothing else than simple wallet. It just gives you Private key and wallet address in paper (PDF or any other mode). Quote
although you can deposit funds into a paper wallet several times, you should withdraw all funds only once, spending everything.
This is because in the process of unlocking and spending funds some wallets might generate a change address if you spend less than the whole amount. additionally, if the computer you use to sign the transaction is compromised, you risk exposing the private key.
This is because in the process of unlocking and spending funds some wallets might generate a change address if you spend less than the whole amount. additionally, if the computer you use to sign the transaction is compromised, you risk exposing the private key.
If transferring all funds every-time is required. Then, if I want to transfer X amount of funds to someone then I need to transfer the remaining funds to some other address. That means I am paying transaction fee twice.
If I forget to transfer the remaining funds to other address can it be easily hacked?
Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
How fixable is it to use paper wallet in this case?
Quote
If transferring all funds every-time is required. Then, if I want to transfer X amount of funds to someone then I need to transfer the remaining funds to some other address. That means I am paying transaction fee twice.
I will explain you with example,If X user is sending 1 BTC to user Y and paying 0.001 BTC as fees
and If same user (X) is sending 1 BTC again to same user (Y) and here you have to pay fee of 0.001 BTC again.
Everytime you send BTC you have to Pay fee everytime.
Quote
If I forget to transfer the remaining funds to other address can it be easily hacked?
Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
How fixable is it to use paper wallet in this case?
Nothing is going to get hacked till your Device not get hacked. Paper wallet is in Either in PDF or you can download that on Paper. .Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
How fixable is it to use paper wallet in this case?
The process of sending BTC is same as in any other wallet.
Enter receivers wallet address
Enter Amount
Click on Send.
You are sending the amount which you want only. If your wallet has 1 BTC and you are sending 0.4 BTC to user X then he will receive 0.
4 BTC only and your wallet will have 0.6 BTC.
How to create Paper wallet
Go on BitAddress.org
Move your mouse around on your screen.
And after moving mouse on screen after few seconds. And after that you can see below screen:
Above Private Key you can find Print option click on that and save the your Private Key
I read the below lines and a bit confused. Please help:
If transferring all funds every-time is required. Then, if I want to transfer X amount of funds to someone then I need to transfer the remaining funds to some other address. That means I am paying transaction fee twice.
If I forget to transfer the remaining funds to other address can it be easily hacked?
Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
How fixable is it to use paper wallet in this case?
Quote
although you can deposit funds into a paper wallet several times, you should withdraw all funds only once, spending everything.
This is because in the process of unlocking and spending funds some wallets might generate a change address if you spend less than the whole amount. additionally, if the computer you use to sign the transaction is compromised, you risk exposing the private key.
This is because in the process of unlocking and spending funds some wallets might generate a change address if you spend less than the whole amount. additionally, if the computer you use to sign the transaction is compromised, you risk exposing the private key.
If transferring all funds every-time is required. Then, if I want to transfer X amount of funds to someone then I need to transfer the remaining funds to some other address. That means I am paying transaction fee twice.
If I forget to transfer the remaining funds to other address can it be easily hacked?
Won't there be a confusion as in which of my address is holding the account if, this process happens regularly?
How fixable is it to use paper wallet in this case?
Jump to: