Beginner's Safety Best Practices For Cryptocurrency
The world of cryptocurrency is exciting and full of potential. But the first step in taking advantage of these possibilities is to understand the different types of wallets, their pros and cons, and then finding a wallet that suits needs. As many people may know, there are plenty of ways to store Cryptocurrencies: hardware wallets, software wallets, and paper wallets. However, paper wallets are a bit different, because they’re simply pieces of paper. The number of crypto wallet options to pick from might be a bit intimidating to newbies. And while mobile and online banking are becoming more popular, fully digital payment solutions like Bitcoin and other cryptocurrencies are rather intimidating to normal people. To lessen the learning curve, beginners should use paper wallets instead of the hardware and software wallets that experienced Bitcoin users frequent.
But why exactly is paper wallets recommended for beginners?
● Comfort of Use
Although one could assume that having a hardware or software wallet is a necessary part of the Bitcoin experience, paper wallets are more welcoming to individuals who have been handling fiat cash and credit cards for most of their lives. The similarity that a paper Bitcoin wallet has to fiat cash gives people a certain comfort that other wallets simply can’t provide. And, once people get used to handling paper wallets and become acclimated to the Bitcoin environment, they will feel more ready to graduate on to software and hardware wallets.
● Understanding the Bitcoin Protocol
A common misconception that Bitcoin beginners often have is that once they open a wallet, their wallet is always connected to the Bitcoin network where they can take part in transactions. This stems largely from a non-technical person’s lack of knowledge of computer networking, but it can be resolved with paper wallets. The fact that paper wallets are low-tech helps newcomers distinguish their wallets from the network.
● Security
Paper wallets may seem less secure at first, since humans are often the weakest factors in secure systems, but paper wallets put the responsibility of security rightfully in the hands of the owner.
● A Grain of Salt
Paper wallets are a somewhat simple approach to making cryptocurrency a bit easier for the masses. That’s not to say that they should be the end-all, be-all of crypto wallets: paper wallets are still subject to tears, water damage, and other real-world accidents. But, they should not be overlooked. Paper wallets offer excellent experiences to beginners in Bitcoin and are fair tools for teaching the Bitcoin protocol.
So with all of those stated, are paper wallets the best cryptocurrency wallet for the long term? Well, paper wallets can serve as a viable, long term solution for beginner's storage. However, along with certain advantages of course comes with disadvantages of paper wallets that do exists. Cryptocurrency wallets are all built to be secure, but the exact security differs from wallet to wallet. Generally, like any usernames and passwords, the security of wallet comes from using the best practices.
Read this blog for more details: https://blog.kucoin.com/paper-wallet-crypto-sk-st
This is a very good discussion about paper wallets, but you are missing a key point that underlies the whole concept: a wallet, specifically the wallet.dat file, only contains the public and private key pair that identifies the owner and secures his transactions. A paper wallet likewise has on it, usually both fully written out and encoded in a QR-code, those two keys. All of the transactions (which may just be cryptocurrency bought, sold or traded, or smart contracts) are stored in the blockchain. Accessing those or conducting a new transaction requires a computer connected to the internet (even if it is just a cryptocurrency ATM). Nonetheless, a wallet is literally the key (pun intended) to conducting any transactions (specifically adding information) to the blockchain. Anyone can read a blockchain, but only someone with valid keys can add to the blockchain.
Therefore, when the only copy of the keys is stored on a piece of paper (or in an offline hardware device or on an hard drive in a landfill), no one can move funds recorded on the blockchain from one account (identified by the public key) to another account without the corresponding private key held in the wallet.
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