DEFINITION of 'Paper Wallet'

If you’re planning to hold your digital currency long-term, one of the easiest ways to store it is a paper wallet treasured somewhere safe, in the place you would keep all other valuables. At the most basic level, it is simply a document which contains all information necessary to access and spend the Bitcoins at a certain address in the blockchain. 

Logos of Bitcoins are commonly seen in media coverage in innovative styles and the private key printed either on paper, plastic, or metal.

BREAKING DOWN 'Paper Wallet'

Paper wallets provide secure storage for any amount of Bitcoins, since

• they are not typically exposed to malware and key loggers;
• no need to bank upon the security of any website;
• and private keys are protected by 100% ownership.
• they can also be easily stored securely in safes and safe deposit boxes

However, it may be more difficult to securely "backup" paper wallets, and due to the current sub-optimal software support, it may be easier to make a mistake that causes loss of Bitcoins.

A paper wallet involves "printing" and storing Bitcoins in an offline mode. But it's important to remember that, it’s not the Bitcoins that are being printed out like regular currency. It's a document that contains information stored in a Bitcoin wallet or digital wallet, copy of the public and private keys that allow people to transfer money into the wallet and give access to fund spending. Often it will have QR codes so that you can quickly scan them and add the keys into a software wallet to make a transaction.

There are few popular paper wallets providers such as BitcoinAddressUtility, BitAddress.org, BitcoinpaperWallet.com, OfflineAddress.com, SafePaperWallet.com, etc. Moreover, some companies even offer "cold storage" services, i.e. keeping the private key in printed form in a physical location like a safe vault. Although these companies are not regulated by the financial services industry, they are insured against theft.