Published on July 3rd, 2014 by
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In the Let’s Talk Bitcoin forums, one user asked if it was possible to create a paper wallet with two-factor authentication for LTBcoin. “Of course,” I responded confidently, “You can do anything with LTBcoin that you can do with Bitcoin, since an LTBcoin private key is a Bitcoin private key.” But when I considered this further, it occurred to me that I did not know the precise steps needed to accomplish this.
So I set out on a quest to send some LTBcoin to a paper wallet and back and document the process along the way. I am sharing my process here in the hope that it will make the job easier and more comfortable for others who wish to store Counterparty assets offline in a secure paper wallet.
Transferring the Funds to a Paper Wallet
Step 1 - Generate a Paper Wallet
First you need to create a new paper wallet. A convenient way to do this is to use an online paper wallet generator. I used https://www.bitaddress.org
and found it easy to use. Follow the instructions there to generate a new paper wallet and print it. Note that the private key is generated entirely in your browser and it will not be shared with the server or saved. So be sure to check the printout of your paper wallet and make sure that the private key is legible. If you lose this private key, any funds stored at this address can not be recovered.
A sample paper wallet generated at bitaddress.org.
Step 2 - Transfer Your Assets
After you have your paper wallet printed, login to your Counterparty web wallet at https://counterwallet.co
. You can send the tokens to the Bitcoin address on your paper wallet. It may feel strange to send funds to an address that has only existed in paper form, but rest assured that this address is just as valid as any other Bitcoin address.
You may send multiple assets to the same paper wallet address. You may also send BTC to this same address from Counterwallet or any other Bitcoin address. I recommend sending 0.256 mBTC for each asset to the paper wallet in order to make recovery easier as you will see below.
That’s it! You’re done. Your funds are now secured in your paper wallet. Keep it secret. Keep it safe.
Recovering Funds from a Paper Wallet
Step 1 - Sweep the Funds
To recover the funds from your paper wallet, you use a process known as sweeping to move the funds back into a Counterparty wallet at Counterwallet.
To recover the funds, login to your Counterwallet and choose the option to import funds from another address.
Importing funds from another address at Counterwallet
Next you will enter the private key from your paper wallet. This key should be 52 characters long. Counterwallet will verify that the key you entered is a valid private key before you can continue.
You may sweep funds into an empty address or to an existing address that already has tokens.
A screenshot of sweeping funds into Counterwallet
You can sweep one or all of the Counterparty tokens and bitcoin balances from your paper wallet. Note that for each token you sweep a new counterparty transaction will be broadcast to the Bitcoin network and you will need to pay the normal transaction fees.
The transaction fees will be paid from the address in your paper wallet. If you sent only Counterparty assets without any BTC to the paper wallet, you will have to do one of two things. You can send a small amount of bitcoin to the paper wallet address and wait 6 confirmations. Or you can enter the private key of any Bitcoin address immediately to pay the fees from this address.
You will need about 0.256 mBTC in your paper wallet for each asset that you plan to sweep and an additional 0.1 mBTC if you wish to sweep any BTC.
Step 2 - Wait for Your Funds to Arrive
Just as with any Counterparty transaction, your tokens will need one confirmation from the Bitcoin network before they are visible in your Counterwallet address.
Since Counterparty is built on bitcoin, we get to take advantage of bitcoin features for working with our Counterparty assets. And one of those features is the ability to store funds in an offline paper that is resistant to digital theft or hardware failure.
Any process for offline storage that allows a user access to a bitcoin address and a bitcoin private key can also be used to store Counterparty assets as well. So as new techniques and hardware become available for secure bitcoin storage, we will be able to use those tools for securely storing LTBcoin and other Counterparty assets.
So, as a long answer to your short question, dear forum poster, I now say with experience “Yes! You can use an offline paper wallet to store your LTBcoin.”