Author: StJohn Piano
Published: 2020-10-16
Datafeed Article 186
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This guidance article is written to be a printed companion to an Edgecase-style Bitcoin paper wallet.



A paper wallet is a sheet of paper, on which is written:
- A Bitcoin private key
- A Bitcoin address

It should be kept within an envelope (or some other container) so that it doesn't look like anything Bitcoin-related.



Question: Why is it worth going to this amount of trouble to store bitcoin?

Short answer: Bitcoin is an extraordinarily hard currency. Storing some bitcoin is a sensible bet on the possibility that the Bitcoin ecosystem continues to function successfully.

Long answer:
http://edgecase.net/pages/why_to_buy_and_store_bitcoin



Important:

1) A private key controls the bitcoin stored in an address.

2) Anyone who knows the private key can steal the bitcoin that it controls.

3) A photograph of a private key is as good as the private key itself (notably, this is not the case with gold). If you store bitcoin yourself, you should take into account the fact that it could be stolen using a camera.

4) The address is public and can be shared with anyone.

5) If this paper wallet contains the only copy of the private key, and the wallet is destroyed, this key is lost forever. The bitcoin stored within it will not be retrievable. Recommendation: Make at least one backup copy.



General overview of the problem of storing bitcoin:
http://edgecase.net/pages/how_to_store_bitcoin

Recommended reading: Effective offline storage of Bitcoin
http://edgecase.net/articles/160



Example Bitcoin private key (64 characters):
----------------------------------------------------------------
15e7e195332b0aa8a684dc3be1f29dd04daa0a5434c11a8b9e6ad180df076ae4
----------------------------------------------------------------

Example standard Bitcoin address (34 characters):
----------------------------------
1AGygbyEFYduWkkmZbbvirgS9kuBBMLJCP
----------------------------------

To create a new private key, please see:
http://edgecase.net/pages/how_to_create_a_bitcoin_private_key



A handful of errors in the private key can make it impossible to recover the actual private key within a reasonable time frame. Edgecase therefore stores a checksum tree with the private key in order to make it more robust - errors can be located more precisely, and key recovery time is drastically improved.

Here is the same example private key, but in a grid pattern, with a checksum tree above it:

-------------------
9
76a2
bd3c c703 534e 7632

15e7 e195 332b 0aa8
a684 dc3b e1f2 9dd0
4daa 0a54 34c1 1a8b
9e6a d180 df07 6ae4
-------------------

In the private key and the address, capital letters and the number 6 are underlined. This avoids ambiguity (for example, the number 6 could be confused with the letter b).

Edgecase prefers to store a Bitcoin address in a grid pattern, like so:

-------------------
1AGy gbyE FYdu Wkkm
Zbbv irgS 9kuB BMLJ
CP
-------------------

More details:

1) How to write a Bitcoin private key on paper:
http://edgecase.net/articles/156

2) How to write a Bitcoin address on paper
http://edgecase.net/articles/158



You can use a block explorer web application to look up your address and see how much bitcoin it contains.

This page should list an active block explorer:
http://edgecase.net/pages/other_services



If you would like to confirm that the address in the wallet can be derived from the private key, you will need to use a software tool to do this. Edgecase provides such a tool:
http://edgecase.net/pages/how_to_generate_a_bitcoin_address

Procedure: Type the private key and the address into an offline computer. Generate an address from the private key. Compare the two addresses.

This article contains tools that can convert the private key to/from the checksum tree storage format:
http://edgecase.net/articles/152



As a general rule, private keys should never be stored, however temporarily, on an online computer. Exceptions:
1) You would like to practice using the software tools.
2) You don't mind the risk of storing bitcoin on an online computer, and prefer it to the inconvenience of using an offline computer.
3) You keep a relatively small amount of bitcoin on an online computer, for convenience, but keep the rest offline.

Relevant links:

http://edgecase.net/pages/how_to_store_bitcoin_on_a_laptop

http://edgecase.net/pages/how_to_store_bitcoin_offline



If you would like to transfer bitcoin from the wallet address to another address, you will need to create a transaction and sign it. This should be done on an offline computer. Please see this page for details:
http://edgecase.net/pages/how_to_create_and_sign_a_bitcoin_transaction

Details: Bitcoin transactions move bitcoin between addresses. The private key is used to digitally sign transactions. Without the correct signature(s), the transaction is invalid and won't be processed. This digital signature protection is one of the primary reasons that Bitcoin is a hard currency.