What is a paper wallet?
In short
A paper wallet is a piece of paper with a private key and usually its matching address, used to store access to crypto without a permanent internet connection.
Can a sheet of paper hold the keys to your crypto? Think of it as a slip of paper with the secret combination to a safe. The coins aren’t on the paper; they are recorded on the blockchain. The paper stores the private key that lets you move them.
A classic paper wallet includes the private key and the wallet address, often also as QR codes. The address is used to receive crypto and can be shared. The private key must stay secret: anyone who copies it can take control of the corresponding funds.
To use the funds, you need software that signs the transaction with that key. Moving the entire available balance to a new wallet is called a sweep. It differs from simply importing the key into an app, which keeps using the same key.
Why it matters
A paper wallet is a form of cold storage, provided the key was created and kept without exposure to the internet. It doesn’t depend on an exchange account, a battery or a working device to be stored.
That doesn’t make it automatically safe, though. We consider the distinction between “not connected” and “created correctly” crucial. A key generated on an infected computer doesn’t become safe just because it was printed afterward.
What to watch out for
Paper wallet generator websites can be malicious, while printers, photos and cloud backups can leave exposed digital traces. The paper itself is at risk from fire, moisture, fading or simply getting lost. If the only copy of the key is lost, there is no password reset service.
On Bitcoin, a partial spend can send the “change” to a different address that the original paper doesn’t cover. That is why using it requires care. Also, a paper wallet is not the same as a seed phrase: a recovery phrase written on paper is a backup of a wallet, not the classic single-key paper wallet.