Creating A Paper Wallet for Your CryptoCurrency with MyEtherWallet
When investing in cryptocurrency, security is a huge concern. In 2014, a famous online bitcoin exchange, Mt.Gox, was the target of a hack that saw 850,000 bitcoins stolen. For many investors, this was a wake-up call. Keeping your money in an online exchange is not a smart move. The best way to protect your investment is to be proactive. There are already many strategies for storing cryptocurrency, and one of the most secure ways is cold storage. Cold storage involves generating and storing your coins private keys offline. While it might not be ideal for you to keep all of your cryptocurrency stored offline, this option ultimately provides the best security.
Like many others, I too had kept my investments on online exchanges (mainly for convenience). After a few months of investing and seeing some positive gains, I decided it was finally time to move my assets off of those exchanges and into a paper wallet. After a little researching, I decided to generate a paper wallet using MyEtherWallet.com, which is a popular choice for storing ERC-20 tokens. Most of my holdings were in ERC-20 tokens, so that worked out perfect for my use case. ERC-20 is a standard set of rules that tokens must follow to run on the Ethereum blockchain. At the time of writing, MyEtherWallet maintains a list of supported tokens that you can see here.
What is a paper wallet?
A paper wallet is a method of cold storage whereby you generate your public and private keys (generally will output the keys and a QR code) and store them offline using a piece of paper. This is a more secure way to collect your cryptocurrency, as you do not have to worry about carrying around your private keys on your machine.
Creating your paper wallet
Things you'll need: * A printer to print your paper wallet * Spare Thumb Drive (Optional) - another way to store your public and private keys as well as a copy of your wallet.
Let's get started.
First head over to MyEtherWallet
If it’s your first time visiting the site, make sure to read all the info in the modals. MyEtherWallet does its best job to inform users on what they are getting into and some things for which to look out.
Step 1 - Creating Your Wallet Password
The first thing we will do is create your password for your wallet. This is your master password so be sure to make it something somewhat complex but memorable. Once you have typed your password, click 'Create New Wallet'!
Step 2 - Saving Your Keystore File
Next up, MEW will ask you to download your keystore file. Your keystore should be kept private at all times. Do not upload this file to cloud storage providers or keep on any public machines. Your password acts as the encryption for this file, so it is of critical importance to keep this file secure.
NOTE: If you have a thumb drive, now is a great time to move that file from your
/Downloads folder to that drive.
Once you are confident that the file is saved, click on 'I understand, Continue.'
Step 3 - Print Your Paper Wallet
Now you need to print your paper wallet and/or save your private key. Make sure to store it in a safe place. Paper wallets are still susceptible to being stolen, lost, or destroyed, so take extra precaution to make sure that you have stored it properly.
NOTE: You can move your private key to a file on that thumb drive now. Take care to safely and securely store that thumb drive as well.
Once you're all done, click on 'Save Your Address'.
That's it! Now you should be on an 'Unlock' screen with a few options. To unlock your wallet, select
Keystore / JSON File. On the next page, it will ask you to select your wallet file. Go ahead and select your KeyStore file from Step 2 and enter your password!
When you’re done with that and click Unlock, you should now see your wallet dashboard! Within your dashboard, you will be able to print another copy of paper wallet and have access to your public and private keys.
Although many experts warn that this is not the absolute safest option for storing cryptocurrency, it is a much better option than keeping your currency in an exchange.
Thanks for following along!