Cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Dogecoin, Bitcoin Cash (BCH), or Litecoin (LTC) are digital currencies, as you already know, so in order to sell and buy goods and services using them, you need to store them in wallets specifically designed to hold cryptocurrency.
There are three types of cryptocurrency wallets. You can choose to use either the so-called software wallets, hardware wallets, or paper wallets. With software wallets, you need to have in mind that in order to use them you need to be online. If you want to use your wallet offline, you have two options – hardware and paper wallets.
Going offline when it comes to your crypto storage is a good step if your priority is security, but these types of wallets can be less user-friendly than a software wallet.
If you think that going for a paper wallet is the best option for you but you want to learn more about how it works, this article is for you. We’ll give you an overview of all the different types of wallets, go in-depth into how the paper wallet, in particular, fits in, and explain how you can use it to check your balance and trade your assets.
Types of Cryptocurrency Wallets
Simply put, a hardware wallet is a physical device on which you can store your private keys offline, which is why these types of wallets are also known as cold storage.
They’re small devices that look like USB drives that you can plug into any USB port. After you plug the device into the USB port, you’ll be required to insert a passcode/passphrase to unlock the wallet.
The basic principle of the hardware wallet is to ensure maximum security for your private keys, that is, the keys you use to unlock and access your wallet balance. Due to the fact that these wallets store your private keys offline, they are more secure from cyber attacks.
Another thing that’s useful about this type of wallet is that no one will be able to access it without your password/passphrase if your hardware wallet gets lost or stolen, which helps keep your assets safe.
Moreover, in this type of scenario, you can restore your wallet by using a 24-word recovery seed and you’ll be able to use your assets again.
Software wallets are software applications for your computer or your smartphone. Unlike with hardware wallets, in order to use these wallets, you have to be online, which is why they’re also known as hot storage. These software wallets are more vulnerable to cyber attacks because your private key is always exposed online, but on the other hand, they’re more user-friendly.
There are three types of software wallets:
- Mobile wallets
These are the ones that you can just download and install on your smartphone. They offer you everyday easy access to your cryptocurrencies, which makes trading with them using your mobile phone super easy. Mobile wallets are quite convenient because they use QR codes for transactions. The most popular mobile wallets are Coinomi and Mycelium (Bitcoin wallet).
- Desktop wallets
Desktop wallets are another type of software wallet that you have to install on your computer, and they’re generally considered safer than mobile ones. Exodus and Electrum are two of the most popular desktop wallets.
- Web wallets
As their name implies, these wallets are accessed through internet browsers. The downside is that they’re prone to cyber attacks. There are two types of web wallets – hosted and non-hosted. Some of the most popular web wallets are MetaMask and Coinbase.
Paper wallets can be classified as cold storage, the most secure one there is. Simply put, a paper wallet is a type of wallet that doesn’t require a web connection in order to be used because all the necessary access data of the user, such as their private and public keys, are printed on a piece of paper.
With paper wallets, you can access your assets at any time using a smartphone to scan QR codes. If you want to carry out any cryptocurrency transaction, you only need your private and public keys.
You can find numerous websites on the Internet which you can use to generate free paper wallets, such as Bitcoin.com and Bitcoinpaperwallet.com, and it’s good to know that most of these websites are open-source.
How to Check the Balance of Your Paper Wallet?
So, we’ve come to the main point of this article: how to check the balance of your paper wallet. First of all, you’ll need a computer or a mobile phone, and then you just need to follow these steps:
- Go to a block explorer, like Blockchain.info, and insert your public key. You can use these websites as a paper wallet checker. The public key can be entered manually or it can be scanned from the QR code printed on the piece of paper.
- The blockchain explorer will find the public address where your whole transaction history and your cryptocurrency balance are stored. Here you’ll be able to see the balance in fiat currency too.
- If you want to trade some of your funds, you’ll have to enter your private key. For example, if you want to send Bitcoin to another Bitcoin address, you’ll have to scan the QR code that contains your private key or you can enter it manually.
And that’s it!
Nowadays, creating a crypto paper wallet and checking the balance is much easier than in the past, due to the fact that today, every Android or iOS mobile phone is able to scan the QR codes of your private and public keys.
A Few Words Before You Go…
You may think that using a paper wallet is complicated and impractical because it forces you to scan a piece of paper or manually enter your public or private keys each time you want to open it, however, if security means more to you than time, then it’s worth having a paper wallet.