Wallets that are kept away from the internet, commonly referred to as cold storage, are the safest. And that is one piece of advice that is repeatedly given to holders of the digital currency.
However, there is always the issue of convenience.
Coins in your mobile wallet or connected desktop-hot wallets– are easily accessible and transferable. This however exposes them to conniving hackers and thieves.
On the other hand, a paper wallet cuts off these criminals. The challenge in this case, however, comes when you need to transfer the money to others.
Therefore, in using Bitcoins, convenience and security often come across as mutually exclusive. You either sacrifice security for convenience or the other way round.
Balance between convenience and security
But the rule of thumb is that the bigger the amounts of Bitcoins you intend to secure in a wallet the readier you should be to sacrifice convenience for security.
Of course, you can choose to have encrypted digital wallets in place of a paper wallet. However, the latter has several advantages over the former.
A paper wallet has a reduced risk of losing your bitcoins if you forget the password or your hard drive fails. Furthermore, in case you die abruptly-say, a car hit you-your next of kin have an opportunity of accessing it and inheriting your wealth, compared to it getting lost forever.
And all these advantages come with an equal level of security. As some put it; no virus can jump from the computer onto a piece of paper.
However, that is not entirely accurate.
Protect your paper wallet before, during and after generation
Indeed, if a virus is already in your computer and is watching every move and sending screenshots then generating a wallet and printing it on a piece of paper might not be of much help. Not even when you delete the file and empty the trash.
In order to guarantee the security of your paper wallet, therefore, you need to protect your private keys before, during and after generation and printing.
It comes down to ensuring that there is no program that is collecting data and passing it over to someone with the intentions of stealing your Bitcoins.
Running on a secure and updated operating system, using a secure browser, downloading from trusted sources and updating your antivirus software and firewall all put you on the right road.
However, this is never enough, especially if we are talking about large sums of Bitcoins being stored on your paper wallet.
No quick fixes are available, but the sacrifices are worth it
The safest way to generate and print paper wallets is to use wallet management platforms that support offline generation.
A good example of such a platform is the Armory Low. It provides you with an interface to use between an always-offline machine and your wallets on the internet connected devices in the form of a ‘watch only wallet’.
Essentially all private keys remain in the computer that is offline all the time and all transactions are authenticated there. This is before they are exported in the ‘watch only wallet’ using a USB stick to the internet connected computer or device for completion without exposing your keys.
Other methods that are used for the same results include downloading Ubuntu and using it in an offline mode from a CD and with the PC’s hard drive disconnected, to generate and print the wallet.
That said, these processes are not quick and easy to use solutions. They require skills, time and patience, but they guarantee improved security for your paper wallet.