Definition
A paper wallet is a type of physical storage system used for storing cryptocurrency private keys in the form of paper-based documents. A paper wallet contains a public and a private key pair required to make cryptographic transactions.
Understanding the term
Paper wallets were in demand back in 2010 as they were impossible to hack and showed the best resistance against any sort of cyber threats. But around 2016, people’s interest in keeping a paper wallet reduced due to all the hassles it caused. For example, it is incredibly difficult to keep a piece of paper intact for several years.
Though paper wallets are no longer a safe option for storing your crypto keys, they have not gone extinct yet. To create a paper wallet, one would need to randomly generate their private keys using a tool that is either web-based (less secure) or private (more secure). Since cold wallets provide the best protection against online attacks, paper wallets are far better than web-based wallets for storing your private keys.
Takeaway
At first, paper wallets were recommended by experts as one of the most secure cold storage options for cryptos. But as it turns out, paper wallets are far too fragile to last in the long run.