What is a paper wallet? | BTC Direct

Methods and the risks of creating paper wallets

There are a couple of methods to creating a paper wallet. There are web-based key generators such as walletgenerator.net which open-source client-side programs running in Javascript. Another method would be to use a pen and paper. You will need to encode the private key first using Base58Check which removes the characters 0OIl since they are too easy to mistake for one another.

There are monumental risks when it comes to creating your private wallet:

• The website could be compromised
• ​If not audited after every use, private keys could be leaked back to a public server
• Browser extensions could be collecting your data
• Your computer could be compromised
• When printed, if your private key is exposed it is no longer secure
• Your printer may save all work it has printed, increasing exposure of your keys
• Writing out a private key with pen and paper runs the risk of human error

If we were to list all the potential risks paper wallets pose, we would have more bullet points than a Western saloon. It goes without saying, using paper wallets as a form of trustworthy exchange and/or security comes with extreme risks.