Paper Wallets

For securing cryptocurrency long-term, many people turn to a paper wallet, which involves physically writing down the seed words (also called a recovery phrase) on a piece of paper. This method, a form of "cold storage," is considered highly secure against cyber threats because the private keys and seed words are never connected to the internet. However, this offline security comes with unique risks.

Dangers of a Paper Wallet ⚠️

The primary risk of a paper wallet is its physical vulnerability. Unlike a digital wallet that can be backed up online, a paper wallet's security is tied directly to its physical condition and location.

• Physical Damage: Paper is fragile. It can easily be damaged by water 💧, fire 🔥, or even simple wear and tear. If the ink fades, the paper tears, or it gets smudged, your seed words could become illegible, permanently locking you out of your funds.
• Loss or Theft: If you lose the piece of paper or if it's stolen, you lose access to your crypto. Since there's no backup or recovery service, the funds are gone forever.
• Human Error: Writing down 12 or 24 words with perfect accuracy is difficult. A single mistake—a misspelled word, an incorrect order, or an unreadable character—will make the entire phrase useless.
• Creation Vulnerabilities: The process of creating a paper wallet can also introduce risks. Using a public or shared printer could leave a copy of your private keys in the printer's memory. Creating the wallet on a computer that's connected to the internet, even for a moment, could expose your keys to malware.

Best Practices for Saving Seed Words ✍️

To mitigate these risks, follow these best practices for securing your seed words.

• Go Offline and Use a Safe Printer: Generate your seed phrase on a device that is completely disconnected from the internet. Use a dedicated, air-gapped printer that doesn't have internal storage or a wireless connection, or simply write the words down manually.
• Use Durable Materials: Instead of regular paper, consider using a more durable medium. Metal plates are a popular choice as they are fireproof and waterproof. You can etch your seed words into steel or titanium to create a resilient, long-lasting backup.
• Store in Multiple Secure Locations: Don't put all your eggs in one basket. Create at least two copies of your seed phrase and store them in separate, secure locations. A fireproof home safe and a bank safety deposit box are good options.
• Encrypt or Obfuscate: For an extra layer of security, you can encrypt your seed phrase using a cipher or passphrase. Remember to keep the encryption key or passphrase separate from the seed words themselves.
• Test Your Backup: Before you store a significant amount of crypto, do a small-scale "test run." Transfer a tiny amount of cryptocurrency to the wallet you've created and then practice recovering it using your seed words. This ensures your backup is valid and readable.

While paper wallets offer a high level of security from online threats, they demand meticulous attention to physical and manual safeguards. For those looking for a balance of security and convenience, a hardware wallet is a more popular choice as it keeps the private keys offline on a dedicated device while providing a user-friendly interface.

Need help recovering your paper wallet? contact us today, hello@rescu.fyi.