Topic: what are the disadvantages of paper wallet (Read 571 times)

I would point you towards this post from Greg Maxwell: https://bitcointalksearch.org/topic/m.56590276

Personally, I would not use a browser to generate entropy, a seed phrase, private keys, or any other valuable information, even on a permanently airgapped computer. As mentioned, Javascript implementations of these things are too weak and the attack surface is too great. When there are plenty of much more secure methods out there, such as using Core or Electrum, then I see no good reason to use a less secure method.

Could you please elaborate about the risks of entropy and JavaScript? I guess the same entropy risks apply for generating a BIP39 mnemonic in a browser, even offline?

Merci!

If you have an electronic device, which you must to be able to use bitcoin, then you can create a wallet safely.

The options are safe, cheap, easy. You can pick two.

Hardware wallets are safe and easy, but they are not cheap. Paper wallets or other cold storage is safe and cheap, but they are less easy. Hot wallets are cheap and easy, but they are less safe.

If cost is the biggest factor for you, then you can rule out hardware wallets. However, you can still use hot wallets for small amounts relatively safely by taking standard security precautions. I keep a small amount of bitcoin in a hot wallet on my phone and have done for years, topping it up whenever I spend from it. I only ever keep a small amount on my phone, but I have never once been hacked over the many years and multiple phone handsets I have used such a wallet. Hot wallets can still be relatively safe if you use them properly.

And if you want cold storage, then you can do that for free by just taking a bit of time to learn about what you are doing and how to do it. All the tools needed - Tails or some other Linux distro, Electrum, pen and paper - are either free or very cheap. The problem is that most people don't bother to learn how to do it properly, cut corners, and just fire up a random website on their usual computer and then wonder why they lost their coins.

Hardware or electronic wallets are prone to the exact same damage, as well as general degradation of their components or storage medium.

Less convenient, maybe, but generated properly a paper wallet is exponentially more secure than a hot software wallet.

One disadvantage of using a paper wallet for storing Bitcoin is that it is prone to physical damage, such as being torn, burned, or otherwise destroyed. Additionally, if the private key on the paper wallet is lost or stolen, the funds stored on the wallet will likely be unrecoverable. Additionally, paper wallets can be difficult to use for everyday transactions, as they require manual input of the private key. This could lead to mistakes, such as accidentally transferring funds to the wrong address or losing access to the funds altogether.
Overall, paper wallets are considered less convenient and less secure than other forms of Bitcoin storage, such as hardware wallets or software wallets.

How did you create those paper wallets? I doubt you created them properly.
A paper wallet should be generated on an airgapped device and the keys should never connect to the internet. Is this how you generated your paper wallets?

Just because you have your private key on a paper doesn't mean you have a paper wallet.

Strange, am I the only newbie that started her crypto journey using paper wallet? The first wallets I created for BTC and LTC are paper wallets, later when I decided to move into altcoins I still went for altcoins that uses paper wallet, Electroneum was on of those altcoin back then, I just find paper wallet to be easier to use.

If he says buying a hardware wallet is too expensive for him, replying it's easier and safer to create a wallet from a hardware wallet won't help him unfortunately. If there is no solution for poor people, it's sad and it's a big fail for Bitcoin because it was supposed to help unbanked ones IIRC, and some poor countries like Salvador want to try to use it as an official currency.

This is true only if you are using old style paper wallets in which you simply print a single key pair. If you are instead using an HD paper wallet with your seed phrase on the paper, then you can of course use that seed phrase to recover as many different cryptocurrencies as you like.

The major downside to this is that most altcoins, by nature of them being vaporware or scams, do not have good open source wallet software which can operate in an airgapped manner, meaning you risk your bitcoin by restoring the seed phrase to some seedy altcoin wallet.

Further, paper wallets are designed to store only a single currency. You can only have one private and public key to store one kind of cryptocurrency. Meaning, if you have many currencies other than Bitcoin, you need to have another paper wallets to store.

That's not how wallets work. They do not need to be activated and they do not need to be connected to a live blockchain. Any valid bitcoin address already exists and can have coins sent to it, regardless of whether or not it has actually been generated by a wallet. It is entirely possible to create a wallet which is permanently offline and is never connected to the internet in any way, which will sign transaction offline, and it is only the transaction which is broadcasted to the network.

If you think the process of setting up a hardware wallet is too complicated for newbies, then a paper wallet is a very poor alternative suggestion. It is significantly harder to generate a paper wallet in a secure manner than it is to set up a hardware wallet, and it is significantly easier to mess up when generating or using a paper wallet and end up losing all your coins.

Hard ware wallets are too expensive and the setup process can be quite tedious for newbies.
They are vulnerable to physical risk.it can be stolen or even get damaged

The reason people use paper wallet is that they do not need to worry about a piece of hardware or a piece of software failing ,all they need to take care of is a piece of paper. you can store any amount of bit coin on paper wallet, its the safest way to store your bitcoin. it is sometimes not safe to store cryptocurrencies online or in exchange. After all,they are often haked.sometimes even your live wallet on your computer has its risks.
When you own your paper wallet ,the address that holds your bit coin is not yet connected to a block chain. So your wallet is not yet active until you enter your information online and  your wallet is connected to a live block chain.

You don't have to write your recovery seed on a paper, there is nothing great about a paper wallet, all you did was write your recovery key on a piece of paper to keep the seeds offline.

Have you think about writing down your seed on a stainless steel? This makes your backup indestructible to water and fire, stronger than books and papers.

I agree with that, my mistake I mean I would rather use a non-custodial wallet like electrum than use coinbase or any web wallet when making a lot of transactions since it could easily be done on electrum and would cost less when it comes to transaction fees.



I get your point since you could have an issue when it comes to long-term, maybe there are other ways like imprinting it to metal since that's what they do most of the time but it mostly depends on how the owner takes care of it.

No, no. Aluminum has a melting point of approximately 660°C. That's well below the temperature of a candle flame, which is approximately 1,100°C.
Even burning wood reaches temperatures above 1,000°C, so your backup method is definitely not immune to fire. As o_e_l_e_o said, stainless steel is the best way to go.

Everyone suggesting to replace the paper wallet with a metal wallet is missing the point. Yes, a piece of (the right) metal is sturdier than a piece of paper, but it is neither indestructible nor immune to loss or theft. You need redundancy in your back ups - not just for bitcoin wallets, but for everything. Two pieces of paper with the same information stored on them in separate geographical locations is exponentially more secure than a single piece of metal.

There is nothing wrong with using paper as a wallet or as a back up for your seed, and indeed, many of the metal back up solutions are grossly overpriced for what they are given that you can obtain a piece of stainless steel at your local hardware store for less than 10 bucks. The safety hinges on having multiple back ups, not one.

Aluminum is definitely not immune to fire, and will melt at temperatures well below those reached in an average house fire. Stainless steel provides the best trade off between cost and durability.

Paper wallets may be simple. But if you are not careful, you’re gonna have regrets as it’s vulnerable to getting destroyed by either fire or water, especially seed phrases.

I do have a paper wallet that I have printed myself years ago. Until now, it’s still in my room and not destroyed. But I ain’t gonna make that stay for long as I wanna prefer aluminum metal that is immune to fire and water.

If the material is no longer paper and replaces it with metal, then I think the name is no longer a paper wallet.
There are still many other risks that may arise from using a paper wallet beside the ones I mentioned above.

If the goal is for long-term investment, I don't recommend using a paper wallet, as some of the disadvantages of a paper wallet have been mentioned above.

The disadvantage of the first two points can be compensated by applying information to metal, instead of paper, and then the problem of susceptibility to fire and water is eliminated. Also, if it is chasing and engraving on metal, then the problem with print fading is also eliminated. You can also apply a method such as galvanization, for example.

In general, there are various alternatives to paper that are more reliable, but require certain skills, knowledge and banal tools.

I always wanted to know how can I send the maximum amount without any confusion but never tried to learn lol. Had no idea about this. Thanks a lot man. Learned something new but easy trick.

I have used Paper wallet once in the lifetime though I didn't follow the secured method. In fact, I didn't know that wallet generating through online could be hacked. It was the beginning of my crypto exploring. I used that wallet for few months and then moved all the coins I had. After that, I have purchased HW and still using them.