What is a paper wallet?
Fans of fiat are quick to tell us that if they can't 'hold their money', it's not "real". Thus, paper wallets to the rescue! In this video, I talk about what...
What's up party people? Chris DeRose here, Community Director of the Counterparty Foundation, and today's question is: what is a paper wallet? All right, let's begin. So, in Bitcoin we have wallets, wallets are where we keep our money. There's a lot of wallet software and there's a lot of wallet applications. The very first Bitcoin wallet was Bitcoind itself. Bitcoind was the official, and it is the official, Bitcoin client. It's maintained by Jeff and Gavin and some other people these days and this is software.
This is a program that runs on your computer that manages your money. But there's this option of a paper wallet, and a paper wallet is quite specifically a wallet that you print it out on paper and it contains a private key and a public key and this is a wallet. It's something that you can print out on a home computer and you can print it out already charged or you can print it out waiting to be charged. In the case that you just print the piece of paper out with a private and public key without charging, that means there's no money on it. What you can do then is take out your software wallet and usually scan the QR code or you can type in the address that corresponds with the public key and you can send money to that piece of paper, which is kind of cool. That piece of paper is then charged and has money on it.
It is the private key itself that has the money. There's the corresponding public key which is the address of that money and you keep it together, you put it in a safety deposit box maybe or I don't know, stuff it in your wallet or something like that. But that's what a paper wallet is. You can also print it uncharged. Some applications will let you print out a paper wallet as a backup of the software that's on your phone, say. I think Blockchain.
info does that very well. In their paper wallet what they intend for you to do is have a copy of your money, have a copy of your wallet on paper form so that maybe if you lose your phone or something like that you have the piece of paper and then you can discharge it into your phone again. You can sweep it, is what the term is generally called where you take the money off of that piece of paper and you load it onto your phone. There's a spend address that will happen. It will spend to some other key that you have and that's the discharge action. It's kind of a cool effect.
Sometimes what I'll show people is, at our meet ups, here is a paper wallet and I will charge it with money and I will give it to them and then maybe they'll sweep it or maybe they'll hold it or something, I don't know. It's nice for somebody who doesn't want to download the software maybe or I don't know, talking to somebody and I keep these paper wallets on me at times, maybe they want to get into Bitcoin and they don't have their phone on or something like that. You say here's a dollar, it's worth whatever and I think what people visualize is that they can actually print out Bitcoins, they start to see it in a little different terms. It's actually not that different than how the dollar works. With the dollar, the only authorized print centers are the Federal Reserve Banks and such and Treasuries, excuse me, that are scattered around the United States. They have anti-counterfeit measures that are kind of primitive compared to Bitcoin.
You need a certain amount of paper and all these coils and things like that. So that's how the fiat of paper wallet works. So Bitcoin has a lot of the same function but it's a little bit more efficient because it's in Bitcoin and there's no chance of it being counterfeited in any way. Now, yes, you can make a duplicate copy of your paper wallet on a photocopier and I guess if somebody took that photocopy they could spend it so you have to keep it in your custody. But you can always check the balance. You could even set up alerts to let you know if something has changed on that paper wallet.
A lot of the software offers that. Mycelium I think offers that. I'm pretty sure Blockchain.info does as well. Those are the general overviews of paper wallet so hopefully you found that interesting and maybe you have some more questions that you would like to have answered. Explore the channel, see if they're already answered and if not go ahead and tweet me.
My handle on twitter is derosetech and I would love to answer your questions, I'd love to keep you around. Later party people.