How To Use A Paper Wallet
In my last Tutorial I covered how to create paper wallets. But just creating them doesn’t do any good if you don’t know how to store funds in those wallets and get those funds back out. So for this Tutorial we’re going to cover how to use a paper wallet. I’m going to focus on using a single paper wallet. I’m going to save multisig split wallets for another time.
First I want to issue a warning. Do not use the Paper Wallet I’ve produced here as an example to practice with. Because the Private Key is displayed along with the Public Address it’s quite possible that if you send Bitcoin to that address it will get stolen. I will not be held responsible for this mistake. Now then, let’s look at a paper wallet and see what the individual parts look like.
On the left hand side we have the Public Address, or Bitcoin Address. This particular wallet uses “18YhrY8FHu6CJmmzQTRJ3hiBGBiASvWY3o”. There is a QR code there as well. If you scan that QR code with your Bitcoin wallet software it will display the same numbers I’ve quoted here.
On the right hand side we have the Private Key. This is the part you want to keep absolutely safe. It is the part that allows someone to spend the Bitcoin attached to the Public Address above. This particular wallet uses “5JAgSpy4qGvjBwrk3u7Uymnx2yCn8psCgyo64nPrnbacSbU5dtF”. There is another QR code there. But this one is different from the one in the previous paragraph. If you scan this code with your Bitcoin wallet it won’t display the numbers in this paragraph. It will display the numbers in the previous paragraph, the Public Address. This is because the Private Key is not an address, nor is it a separate entity. It is a code that proves you own the Bitcoin in the Public Address. They are linked, which is why they work.
Now that we know the basic parts of a Paper Wallet, let’s look at how they work. To send funds to a paper wallet and secure them, simply set up the transaction in your Bitcoin Wallet software. Tell it you want to send a certain amount of Bitcoin to the Public address on the Paper Wallet.
You can verify that you did this correctly by looking at that Public Address on an online Blockchain explorer. There are several of these out there, but I personally use blockr.io block reader.
Let’s look at the example I created above. If you go to blockr.io and put that Public Address into the search bar you get this page. If you just sent funds to your wallet you should see them in the Unconfirmed section. Now look at the Total received. If this is more than 0 in this example you know someone didn’t heed my warning above. Once they are confirmed by the network, which could take an hour or so, you’ll see them in the Balance section. If this is more than 0 in this example, feel free to steal those funds using the Private Key below. That’s really all there is to it. As long as you hold on to that Paper Wallet and keep that Private Key secure the Bitcoin you sent to that Paper Wallet will be secure.
When you want to access those funds or swipe the funds from the example above you go through nearly the same process. The main thing is that you’ll need to use a wallet software that allows you to sweep a paper wallet. If you’ve been following my Tutorials, you should be using Copay, but there are other wallet softwares out there that do it as well. Another is one of my favorite wallet softwares, Mycelium, for instance. But I’ll continue with the Tutorial assuming you’re still using Copay.
Open up Copay and click on the gear in the upper right.
Click on Advanced.
Click on Sweep Paper Wallet.
Click on the icon on the right side of the Paper Wallet Private Key line and use your camera to scan the Private Key of the Paper Wallet. If you don’t have a camera on the device you’re using then type the Private Key into that same box.
Click on Scan Wallet Funds. Notice: if you just sent funds to this Paper Wallet they may not show up right away because the funds may not be confirmed yet. The software will only see a confirmed balance at the address.
Copay will show you how much Bitcoin is found. Click Sweep Wallet all the funds available will be transferred to your Copay wallet.
And that’s it. You’ve added Bitcoin to a Paper Wallet to secure it and transferred Bitcoin back out of a Paper Wallet. This is the cheapest, most secure way to store Bitcoin.