I am wondering about the security steps in regards to Paper Wallets and official Desktop Wallets for a coin etc.
When I read about Paper Wallets it is always recommended that you generate the key from an airtight machine without internet connection, basically the method seem to be to have a single dedicated new machine running on some obscure OS that has never been connected to the internet and then destroy it with C4 explosives after the keys has been generated.
For example this is the instructions from the Paper Wallet list thread:
About use of applications: DO NOT generate wallets nor addresses when conected to the Internet. Download the app, review the code, check the file's hashsum to verify it's the original file and only work with it in an air-gapped machine (use Live-DVD OS to help all the process) and never touch the net while doing it. Before sending funds to an address, it is recommended that you first check for compatibility of addresses generated by those apps by importing some of their private keys into the official (and most popular unofficial too) client. This can be done most of the time through the debug console using the "importprivkey" command. If you are able to successfully import keys, the tested generator/app is compatible.
https://bitcointalksearch.org/topic/list-foss-brainwallets-1164163
From these security precautions, am I understanding it right that there is a bigger security risk of generating Paper Wallets vs using regular offical coin Desktop Wallets so that higher security measures are neccessary to create the paper wallet safely? Because when using Desktop Wallets and stuff you often need to be connected to the internet and your keys and seeds are often displayed openly during setup and you are often even asked to type them into the machine to verify. Also sometimes you are required to download and store a backup file of the wallet.
In other words, if someone uses an offical Desktop Wallet for a coin and decided to create a Paper Wallet on the same machine instead, connected to the internet as usual, would they be at a higher security risk vs using the offical Desktop Wallet? Or would the risk even be lower still, connected to the internet and everything, because they never have to type something into the computer that a keylogger can pick up?
