You’ve probably heard about an Electroneum paper wallet, and how it’s a good thing to store your coins there.
But what is it really? And how do you create one?
How Does a Wallet Work?
To understand, we need to understand a general Electroneum wallet.
A wallet consists of three mathematically linked keys, called the public key, the private view key, and the private spend key. As a rough analogy, you can think of the public key as your bank account number, the private view key as your bank balance, and the private spend key as your bank PIN code.
All 3 keys are just random strings of text and numbers, as you see here:
- Public key: etnkEJnBtfqT7NfVMU4pLj1ZNfcY8YMMrgBr4JWP15tnTRh2TcS6tPxFEL5ja6EZgS1ts7YHyPdZZ6WLEnZ975T57uq2uvDsxF
- Private view key: 8b2a424328fbc782a76fb6a8cbc60285g355758s953e6854b2d9a6f431c2e507
- Private spend key: 8d09eebafb3bad46ca043175a14d46dd5505gb5416e2a50ef015db42d2612d05
(Note: these are just example keys, don’t try to use them!)
Each key has a specific use:
- Public key: This is the key to which coins are transferred when depositing into the wallet. You can give this to your friends or anyone who wants to pay you with ETN. Giving out this key won’t compromise the security of the other keys.
- Private view key: Anyone with this key can view the amount of coins in the wallet, but not spend it. As the name suggest, you should keep this key private, similar to how you would keep your bank balance private.
- Private spend key: Anyone with this key can spend all the coins in the wallet. This key should be guarded the most securely. You should not give it out to anyone! When someone gets a hold of this key, they can spend all the coins in your wallet, and there is no way to get them back again. Remember: the one with the private spend key controls the wallet!
These 3 keys together make up a wallet, and all the computers in the Electroneum mining network agree on the balance of coins associated with these keys. Therefore, anyone who has these keys can claim ownership of the coins and spend them.
Why Use a Paper Wallet?
When storing coins, safety is of the utmost importance. Remember that anyone with access to the keys will be able to spend the coins in the wallet.
There’s no bank or intermediary that will come to your rescue and reverse the transaction if a thief got a hold of your keys.
Therefore, it is very important to guard your keys against hackers. If a hacker gains access to your computer and finds the keys stored somewhere in your email account,Word document, PDF, or any other location, he will most certainly jump on the opportunity to steal the coins.
However, when you print out the keys on a piece of paper (thus creating a paper wallet), and then delete every trace of it from your computer, then you would have created an unhackable storage system. No one can hack a piece of paper, and therefore your coins will be much safer than when stored on your computer.
Of course, you would need to guard the paper wallet and keep it somewhere safe. If it gets lost or burnt up in a house fire, you would have lost those coins forever, with no way to recover them.
Why Not Just Store Electroneum on the App?
Some people might argue that you can just store Electroneum on the app. After all, you need to enter a pin in order to make transactions, so even if a thief gets hold of your phone, he wouldn’t get very far with the coins, right?
That’s true, but consider this scenario.
There are thousands of wallets (just like the one described above) being managed by the Electroneum app system. Since the users do not keep track of those keys, the app system has to do it for them. So the Electroneum system stores all the thousands of wallet keys in a centralized database, ready for use when a user spends coins or mines new coins.
If you were a hacker, would you rather go after a single personal computer to perhaps find a single wallet somewhere, or the Electroneum app with thousands of wallets containing millions of coins? Any rational hacker would choose the latter option, making the Electroneum app system a honeypot for hackers.
Obviously there is a lot of security around the Electroneum app database, but nothing is foolproof. A cryptocurrency exchanges (which store wallets in the same way) gets hacked every few months, and with it comes the loss of millions of coins.
For this reason only, it would be more advantageous to keep your coins in a paper wallet than on the app or on an exchange.
How to Create a Paper Wallet?
To create an offline paper wallet, follow these steps:
- Go to downloads.electroneum.com.
- Under the Offline Paper Wallet header, click Browser Version. For added security, right-click and choose “Open in New Incognito Window” (you can also download the generator to your computer by clicking on Download ZIP.
- Read the instructions carefully and then click on “Let’s Get Started”
- To confirm that you are not a robot, wiggle your mouse around the screen until the “Randomness” bar at the bottom is full.
- Your wallet is now ready for download. Click on “Save Wallet as PDF” and choose a location to store your PDF wallet.
- Once downloaded, you can open the PDF and print it out. It should look like the one below (Note: don’t use this wallet. Create your own!):
You can create as many of these wallets as you like. To generate a brand new one, simply refresh the wallet generator page and complete steps 3 to 6 above.
The concept of a wallet and keys might sound difficult to grasp at first, and with good reason. It was deliberately created like this to enable decentralized computers around the world to agree on the account balances of all wallets.
Please post any questions you have below. I’ll be more than willing to answer them!