In fact, Cryptocurrency Exchanges are divided into several varieties with fundamental differences in purpose, legal status, set of functions and terms of service. But sometimes even experienced crypto users find it difficult to name the differences between them. Such ignorance can come at a price, from exchanging coins on unfavorable terms to losing money altogether.

So, if you want to save and make the most of your crypto assets, spare a couple of minutes to read this article.

After reading it, there will be much less “white spots” in the topic of cryptocurrency exchange for you.

Contents

• Defining terms
• Cryptocurrency Exchanges
• Instant Swap Exchanges
• Peer to Peer (P2P) Exchanges
• Conclusion

Defining Terms

It is necessary to understand that there are three main types of Crypto Exchanges:

• Cryptocurrency Trading Exchanges are trading platforms similar in nature to stock exchanges, but specializing specifically in cryptocurrencies. It allows selling and buying crypto coins for fiat money or exchanging one cryptocurrency for another.
• Instant Swap Exchanges are specialized services of fast exchange of cryptocurrencies, as well as fiat currencies and funds of different payment systems.
• Peer to Peer Exchanges are services that do not perform exchange on their own, but only bring together buyers and sellers.

It is impossible to say unequivocally that any of these tools is better than others, because they are designed for different purposes. Let’s look at the features, advantages and disadvantages of each of the above types of Exchanges.

Cryptocurrency Exchanges

By registering on the Cryptocurrency Trading Exchange, you get access to various trading tools. The main user’s task is to make a profit by exchanging some digital currencies like BTC, ETC, ETH for others, or for fiat currencies.

In fact, Trading Exchange can be considered a P2P service, which will be discussed in the next section of this article. The exchange simply pairs buyers with sellers, and since there are many users, the exchange process is quite fast.

Buying cryptocurrency on Cryptocurrency Trading Exchange can be done in one of two formats:

• Direct Card Purchase. The user pays for the cryptocurrency with a bank card. The purchased assets are credited to the exchange account and can be used for trading.
• Fast exchange. First, the user deposits the account in fiat currency, and then through the quick exchange form exchanges them into cryptocurrency. In this case, the current market rate is automatically set.

Exchange of funds in Trading Exchange is made by creating orders. This mechanism allows you to make transactions at the best possible price. When creating a limit order, you specify not only the amount of the asset to be bought/sold, but also the desired price. The deal goes to the list of limit orders waiting to be executed and will be executed immediately as soon as a counter-order appears on the same conditions.

It should be noted that Cryptocurrency Trading Exchanges are much more complex and serious in their purpose than other cryptocurrency exchange tools. They have a high level of user control (including AML and KYC policies) to prevent fraud and use for criminal purposes. This means that without identity verification, including by providing documents, you will not be able to fully use the functionality of the exchange. Sometimes the verification procedure takes quite a long time – several days or more. But its main problem for users is something else.

Law enforcement is certainly a solid argument, but imagine if criminals or corrupt law enforcement took possession of your personal data and transaction information. Would you feel safe even if you had done nothing illegal? For those who think that this is unlikely, it is worth to read about the situation around crypto exchange Wex (formerly BTC-e), which received a lot of publicity in the media. We cannot definitely say that representatives of power structures of any of the states were involved in this case, but there is a fact that the owner of the crypto exchange fell under pressure and was forced to hand over to outsiders funds (and, possibly, users’ data).

In fact, there are many more cases of cryptocurrency owners being criminally hunted, especially in “third world” countries. So the need for anonymity is not only for criminals, but also for ordinary users who do not feel protected by law enforcement in their countries. Unfortunately, Trading Exchanges does not guarantee 100% security here.

Another danger that lurks for Trading Exchanges users is blocking accounts with large funds on various pretexts. For example, Bitfinex exchange can block your account at any moment and demand documents confirming the legality of funds origin. At the same time, the exchange discriminates users by the place of residence, not recognizing the validity of documents on the origin of funds issued in certain countries. The list of “bad” countries is probably compiled at the discretion of the administration, and it cannot be seen in the public domain. The true policy of the exchange is only revealed the moment you say goodbye to your money.

This is a warning to all users who wish to use Trading Exchanges, like Bitfinex, for long-term storage of large amounts of cryptocurrency!

However, if Trading Exchanges were that bad, they would have lost all their users long ago. But on the contrary, their popularity is growing. One of the main reasons for this is the opportunity to exchange cryptocurrencies at the most favorable rate, provided that you do not convert your crypto coins to fiat and vice versa too often.

Advantages of Trading Exchanges:

• Automatic mode and high exchange speed – transactions are instantaneous, which is a big plus given the high volatility of cryptocurrencies.
• More favorable rate when exchanging cryptocurrencies.
• Limit orders mechanism, which allows you to make a transaction, waiting for a given exchange rate.
• Higher levels of reliability and security compared to exchangers.

Disadvantages of Trading Exchanges:

• High commission for depositing and withdrawing fiat funds.
• More complex mechanism for managing your funds compared to exchangers.
• To gain full access to the functionality of the exchange, you will need to pass the verification (procedure may take several days).
• Exchange administration can block your account at any time, and require documents on the origin of funds. If your documents are not convincing enough, you will lose access to your assets.
• Risk of leakage of sensitive personal data.

Overall, Trading Exchanges is a good tool for advanced users looking to make money trading crypto. But even they should consider the risks described above. But for those who want to exchange crypto only from time to time, Trading Exchanges is likely to be too cumbersome a tool.

Instant Swap Exchanges

Instant Swap Exchange is a platform focused on exchanging various fiat and digital currencies. It does not allow you to regulate the price by creating orders. The exchange is carried out strictly at a predetermined rate, which usually already includes a commission to the service.

Many crypto experts believe that Instant Swap Exchange is outdated. The peak of Instant Swap Exchanges was in the period when the cryptocurrency market was less developed and it was possible to buy or exchange cryptocurrency exclusively through these services.Now there are a lot of platforms providing similar services.

From the historical beginning of Instant Swap Exchanges until today, there are about 4,700 services of this kind, of which 440 are active.

Nevertheless, there are still a number of popular Instant Swap Exchanges, such as Bitni.com, which are unlikely to cease to exist in the foreseeable future. The secret of their success is ease of use, complete anonymity and quite profitable exchange rates comparable to Trading Exchanges. So it is definitely too early to talk about the death of Instant Swap Exchanges in general.

We should add that any crypto exchange service, regardless of its type, is quite a risky venture for many reasons.

According to Cointelegraph.com, several dozen different crypto exchanges closed unexpectedly in 2020 alone:

“As least 75 crypto exchanges have closed down due to hacks, scams or simply disappeared for unknown reasons so far this year. 

According to the Crypto Wisser Exchange Graveyard five of the exchanges were labelled as scams, and four, including Altsbit, and Nerae, were flagged as being hacked.

In total 31 were shut down voluntarily while 34 were labeled as ‘MIA’ for disappearing with no explanation. The Dutch exchange NLexch, and Chilean Chilebit were the only two flagged as being shut down by their respective governments in 2020.”

Nevertheless, looking at the causes of the problems throughout the crypto exchange industry, Forbes expert Clem Chambers states:

“Crypto Exchanges Are Dying, But They Won’t Fade Away.”

We believe this statement can be fully applied to Instant Swap Exchanges as well. Although they have to face the competition with other services, they still occupy their own niche, and there will always be demand for their services.

Advantages of Instant Swap Exchanges:

• Extremely easy to use.
• Basically, do not require registration.
• No need to pay commission for deposit and withdrawal – you will be charged only for the exchange itself.
• Quick tech support.
• Many Instant Swap Exchanges offer a cumulative system of discounts.

Disadvantages of Instant Swap Exchanges:

• Often the exchange takes quite a long time. In many exchangers, operations are performed manually, there is no automatic mode.
• Less favorable exchange rate compared to Trading Exchanges.
• A limited set of cryptocurrencies available for exchange.

Instant Swap Exchanges are suitable for those who want to buy/sell cryptocurrency quickly and are not going to do it too often.

Peer to Peer (P2P) Exchanges

Peer-to-Peer communication eliminates intermediaries from the cryptocurrency exchange process. With the help of such services, two counterparties can successfully agree with each other on the purchase or sale of cryptocurrency. The platform itself in this case acts as a guarantor, charging a small percentage for its services.

Advantages of P2P Exchanges

• Absence of a “weak link” – a centralized authority, which can put users’ accounts at risk if hacked.
• Independence from government agencies. While regular exchanges and exchanges are under pressure from the outside, P2P Exchanges have no companies behind them to put pressure on.
• Anonymity. The vast majority of peer-to-peer platforms don’t ask for verification of identity, and some even work without registration.
• Security. No one can intercept the funds because they are sent directly from one user to another, rather than going through third-party currency accounts.

Disadvantages of P2P Exchanges

• Low liquidity. The number of trading pairs and users is incomparably less than on the usual centralized platforms.
• Dependence of transfers on the status of banks and payment systems.
• Long waiting time for the transfer.
• Less intuitive interface compared to other services of this kind.

How to choose P2P Exchange

Choosing a service of this kind, you should pay attention to the following indicators:

1. Reputation. It is best to work with projects that have been operating for several years without criticism. So you can be sure that you will not encounter fraud. Also, the system of working at these sites is thoroughly debugged, there is no risk of programming errors.
2. Security – what security features have the developers provided to protect the user’s finances.
3. Payment methods. The more a choice of supported payment systems for sale/purchase, the more opportunities for flexible management of your funds.
4. Commissions. What percent of the transaction amount the site takes in its favor.
5. Liquidity.

The last thing you can look at is user interface and convenience of management – if you are planning a long and active use of the exchange, then this indicator will also be important to you

In general, professional traders are not interested in P2P Exchanges; they are used mainly for one-time exchanges. But, in contrast to Instant Swap Exchanges, which make exchange at a fixed rate, here you can find the most profitable rate for you. Also an important advantage of P2P Exchanges is their anonymity.

Conclusion

We have considered all the major differences between Trading Exchanges, Instant Swap Exchanges and P2P Exchanges.

There is an opinion that Instant Swap Exchanges are a relic of the past, when you couldn’t buy cryptocurrency any other way. Today, most Trading Exchanges already offer an alternative – buying from a card.

Whatever it is, the popularity of Instant Swap Exchanges is unlikely to decrease in the near future. They are actively used in different situations, which means that it’s definitely too early to talk about the decline of this industry, as well as the decline of P2P Exchanges.

Any of the listed methods is good in its own way. You start from a specific situation, what is important to you at the moment – anonymity, speed, profit, or support of certain payment methods, and choose on the basis of these criteria.

You can flash the image to a USB drive or any other drive using Balena Etcher.

Log in to your HiveOS account, and you are ready to start setting up. Farms are managed via a web interface or a mobile application.

By clicking on the plus sign at the top, you can add a new farm if you are on the main page of the dashboard.

Now you need to go to the rig further down the menu hierarchy by clicking on it in the list and create a worker, which we will configure for mining ETC under HiveOS.

Then you need to fill in all the empty fields in the window that appears.

Next, you need to add the ETC wallet address to HiveOS. (For example, the one you created with the ETC Wallet).

To do this, go back to the main page of the dashboard and go to the wallets section and click on the “Add wallet” button.

Next, we move on to creating a Flight Sheet, which will be launched in our worker.

Select a coin and an ETC wallet from the list, select a Pool, and specify a miner. We advise you to mine with Phoenix, it is considered to be the best at stability and cost savings if glitches happen, because it knows how to restore found solutions after rebooting the farm after a glitch or a freeze.

Now you need to log into your acoount on the farm. This can be done in two ways, one of which: download the rig.conf file in the farm settings and put it in the root directory of the HiveOS flash drive.

If the flash drive is not displayed in the system, then try changing the drive letter using Partition Wizard Server or through the control panel.

However, the rig may glitch and not load data from the config file, in this case, you will have to connect a monitor and keyboard, and connect manually by entering the rig ID and password. During boot, HiveOS will automatically detect GPUs and load necessary drivers for them.

After your rig is “online”, you can proceed to start mining. To do this, you need to go from the dashboard to the rig, then select the worker from above and go to the flight sheets section.

Now just click on the rocket icon, and the miner launch process will start, after which the DAG file will be loaded into the RAM of the video cards, and after a while the hash rates will be displayed.

Overclocking graphics cards in HiveOS

If you have an AMD RX 400 or 500 series, then they need to be flashed under Windows using Polaris Bios Editor and ATI WIN Flash, although the main thing is to change the RAM timings for Ethereum Classic mining, and you can overwrite the Bios itself with a standard tool in HiveOS.

Next up is overclocking and downvolting in HiveOS. Just click on an icon located opposite to the list of graphics cards in the rig.

In the window that appears, you can enter the overclocking values ​​suitable for your video card (core frequency, memory frequency, power consumption, etc.).

You can also select values ​​for fine tuning your video cards on the “Popular presets” tab, they are left by the same miners in the HiveOS database.

But the essence is the same, to achieve the maximum profit (benefit) with minimum power consumption and low GPU temperatures. For AMD, this is usually a core downvolting, memory overclocking (after changing the timings). For Nvidia, these are Power Limit, core overclocking and memory overclocking. Everything is selected by the method of experiment individually for each graphics card. We recommend that you make the maximum downvolt to get the silence and stability of the farm.

HiveOS – fan setting

The fan speed can be set separately for each graphics card, but the value will be static. HiveOS has an excellent AUTO FAN function that allows you to set a target temperature for GPUs, and the system will automatically adjust the fan speed, as well as perform any action if it overheats.

Setting up Watchdog in HiveOS

The watchdog functionality helps to monitor the stability of mining. In case of errors and glitches of the graphics cards of the farm or miner, it will perform any action: reboot the miner or reboot the system.

Set the sliders to “on” in the “Reboot on GPU error” and “Do not restart on loss of Internet” columns. Specify the minimum hash rate of your graphics cards, if its value is less than specified, then the Watchdog will be activated. Set the miner restart time to 5 minutes, and the rig restart time to 6 minutes. Otherwise, if the dag file is loaded for a long time, the watchdog will mistakenly think that the rig has some problems, while you only have a slow drive and processor (or Internet connection).

You can stop and restart the miner manually, look for the pickaxe icon at the top.

It appeared in 2016, not long after the initial birth of Ethereum, and it actually wasn’t unsuccessful. It’s not a revolutionary new trend that ETH turned out to be, but Classic is still a very valuable and very promising coin. Not only that, but it’s also a unique experience, not entirely similar to ETH.

Situation around Ethereum Classic

Like most forks, Ethereum Classic came into being because a group of users didn’t like the update that the team of developers of the original coin decided to get released. In this instance, the change wasn’t as important as the remaining users’ desire to keep the original concept largely intact.

That’s why this one is called Ethereum Classic – as opposed to the New Ethereum that went a slightly different way, grew in value, and came to be the second most-prized coin ever. 

So, if Ethereum is so much more successful (not to mention Bitcoin), why choose Ethereum Classic of all things? Well, there are reasons.

#1: Promising Trend

For the past several years, Ethereum Classic has been stubbornly climbing in value. Of course, if you look at the graphs, you’ll see that there have been ups and downs, and there have been just as many sudden drops as there were increases. However, the general trend is still positive.

If you look at this coin as a potential investment, you may be onto something. Ethereum Classic uses the same stable, reliable mechanisms to keep its value steadily climbing even in spite of the market trends that increase its volatility and risks. 

Even though it should be riskier, it’s not. In fact, you are probably going to be safer with ETC than with ETH because the latter has a much bigger trading volume and, as such, is more susceptible to sudden price changes.

#2: Reliability

What makes Ethereum Classic a reliable, sturdy mechanism is actually a mix of two factors.

Firstly, the system of smart contracts used in Ethereum and Ethereum Classic is safe and secure by design. It’s a two-party decentralized system that allows people to construct fault-proof sequences, which come into action and conduct the transaction on their own when the requirements are met.

It’s constructed in such a way that it’s very hard to hack into your contract unless there is some definite flaw in its structure. Even that is hard to miss nowadays, thanks to the second factor.

Secondly, they kept polishing the original formula all these years, instead of adding new features to it. Their commitment to preserving the ‘classic’ Ethereum led them to a logical condition where they simply get rid of the remaining bugs, improve the quality of life, and make sure you don’t have downtimes.

That’s why ETC is not vulnerable to attacks, and also why its value is more stable than you would think (it’s just a calm experience without any major incidents).

#3: Field for Experimentation

The good thing about having your entire system run on smart contracts is that you can actually do whatever you want with them. If you know something about the coding sequences, you’ll be able to construct a few contracts. Even if you don’t, there are still tons of templates, and the creation process isn’t really difficult.

The good thing about ETC is that your decision to invest in Classic allows you to create projects that run on this currency. The smart contracts can take any shape. For instance, you can tie it to a widget and have someone pay you money in the exact sequence you want them to, all in a perfectly decentralized and automated manner.

#4: Very Easy ETC Mining

ETC developers did a lot to make sure the mining process on their network is extremely easy. They’ve removed many obstacles and constantly make sure there is no downtime, delays, or other technical issues that can reduce the mining efficiency of the users.

This fact correlates with another good aspect of this currency – the good value. Although not as valuable as some top crypto (like Bitcoin and Ethereum), each ETC coin is still worth about $60, as of August 2021. 

What it means for you is that you can continue mining a reasonably valuable coin without worrying that it’s going to decrease in value or otherwise damage your own profits. Part of why Ethereum Classic is so successful is actually because of its association with Ethereum proper. 

Whether they like it or not, part of their success is due to Ethereum. While Ethereum succeeds, so does Ethereum Classic.

#5: Availability

The problem with some obscure coins is that you can’t always redeem them for fiat money on exchanges. Even Binance often lacks them as exchange options. Ethereum Classic, by comparison, is a rather old cryptocurrency. Moreover, it was introduced to many top-tier exchanges from the get-go.

It’s true – a lot of them backed Ethereum Classic in the first months of the fork. That doesn’t necessarily imply privilege, but it shows you that most proper exchanges have been working with ETC for a long time now, and others joined it later. They had a lot of time to do that.

As it should be, let’s first talk in two words about what ETC (Ethereum Classic) is. It didn’t appear that long ago, but considering its predecessor, Ethereum Classic at the time of its “birth” didn’t need any more advertising. In fact, it is a hard fork of the already popular Ethereum network, which took place in 2016. You can learn more about the tokens and the network itself in the article What is Ethereum Classic.

To work with any tokens or virtual currencies, you will need a digital ETC wallet. The main thing is to find the right trusted service. There are several different types of cryptocurrency wallets (hardware, software or online services). Perhaps the easiest and most convenient option would be to use ETC Web Wallet, presented on our website. Hardware wallets are recommended for storing significant amounts of money, but first you will need to buy such a device. Its price is $80-250.

Is it worth mining Ethereum Classic?

Often asking the question whether it is worth mining this or that crypto, people mean profitability. And in this question, it is important to consider many factors:

• Availability of equipment.
• Initial capital – the possibility of buying and assembling a farm or special equipment (ICO).
• The cost of electricity.
• Complexity of the network (mining).
• The cost of tokens when exchanging into fiat money.

In addition, it is worth taking into account other less important, but still affecting the final result, factors:

• Exchange and withdrawal fees.
• Currency volatility.
• Mining in a group or solo.

To understand what equipment to buy, how to mine ETCs (solo or in a group), what is the volatility of currency, what affects it and so on, you need to study the issue in detail. It is simply impossible to describe everything in one article, but we will consider the main points.

Leaving all of the above outlined and immediately answering the question of whether or not to mine ETCs, at the time of writing this article – it is worth it. And the profits are not bad at all. The equipment pays for itself within 3-7 months (depending on the capacity and cost of electricity in your country).

However, you can estimate the potential profitability of mining Ethereum classic yourself using online-calculators. One of the most popular is WhatToMine. Go to the site, choose Ethereum Classic altcoin and enter:

• The cumulative hash rate of riga video cards;
• power consumption;
• power cost;
• the commission of the pool.

The calculator will give you the information about the estimated amount of coins to be earned during a day, week and month and will calculate the profitability of mining ETC at the moment. However, you should also take into account the possible fluctuations of the coin’s price in the future.

What you need to start mining

Mining Ethereum Classic does not differ from other cryptocurrencies. That is, in fact, all the settings are almost the same, with the difference that you set up mining ETC on a different pool, other tokens and a different wallet. That is, you just specify the appropriate site and wallet addresses. If you have not encountered such questions before, let’s look at everything in order. To mine ETC tokens you will need:

1. Access to a power grid.
2. Equipment – here you have a choice:
   • Build a farm on video cards – the advantage is that you can sell the cards you bought and recoup most of what you spent. You can do this at any time.
   • Buy ready-made equipment – the advantage is that initially it will be designed for efficient mining ETC, but with the increasing complexity of the network such a gadget will lose its merits. And after the device will work out its resource, you will not be able to sell it.Fortunately, at the moment, you don’t need specialized stations or superpowered assemblies to mine Ethereum Classic. A single farm on a few video cards is enough.
3. Software – so-called miners.
4. A suitable pool.

That’s all you need to start mining Ethereum classic. Now let’s take a closer look at some points.

Pools for mining Ethereum classic

At the moment there are quite a few groups (called pools) where you can do mining Ethereum classic. Choosing the best pool is quite difficult, especially since they are very similar to each other. The differences, if any, are very small. Still, let’s look at what pools you can use:

This is a list of the main pools for group mining. It is worth noting that some of them allow solo mining Ethereum classic. Using your computer (or farm) you create new blocks. For this, the network pays remuneration in the form of Ether Classic tokens. But first you need to set up your mining hardware and software.

Choosing and setting up video cards

We will talk about mining Ethereum classic on video cards, because it is the most profitable option. And today there are two competing manufacturers: Nvidia and AMD.

In this regard, there are divided and miners. There were two camps – green and red. To make the right choice and mining Ethereum classic was profitable, you should consider such parameters:

• Power consumption.
• Output power (hashes).
• Cost.

The better the ratio (less consumption and more power output), the more profitable the video card. Well, the lower the price, the faster you pay back the costs.

The most profitable graphics cards are:

• AMD Rx 470 8 gb – 28-30 Mh/s
• AMD Rx 480 8gb – 30-31 Mh/s
• AMD Rx 570 8 gb – 28-30 Mh/s
• AMD Rx 580 8 gb – 30-31 Mh/s
• AMD Rx 5700 XT 8gb – 55 Mh/s
• Nvidia RTX 3080 – up to 90 Mh/s
• Nvidia RTX 3070 – 64 Mh/s
• Nvidia RTX 3060 – around 50 Mh/s

These speeds of mining ETC on Dagger-Hashimoto algorithm in AMD Rx video cards can be achieved by changing the VRAM timings, by flashing the video card bios, as well as by proper overclocking and downvolting.

Before proceeding to the software setup, you will need to download and install drivers for mining ETC on AMD video cards or any current ones for nVidia video cards. In addition to drivers, there are other ways to optimize mining ETC and increase the performance of video adapters. The most popular are programs like MSI Afterburner. This is a program for overclocking your graphics card and controlling the turnover of the coolers according to its temperature.

Note that after closing this program, all settings for overclocking and fan speeds are reset.

Tuning the Miner

Once you have configured the system and installed the necessary drivers, you should download the miner.

If you are going to mine on Windows, PhoenixMiner is the best solution. Its features and graphical interface are similar to the formerly popular Claymore, but it has certain advantages:

• The developer is charged 0.6%, not 2% like Claymore.
• The hash rate is 1-2% higher.
• Faster DAG-file creation (set of data loaded into GPU memory when mining utility starts).
• Secure SSL connection is supported.

The Ethereum Classic (ETC) network switched to a modified version of Ethash called ETCHash. If you want to mine ETC, download PhoenixMiner 5.3b or higher, otherwise the cards will get rejected.

Greens can mine Ethereum Classic with T-Rex 0.19.1 or Gminer 2.3, and for reds lolMiner 1.16 will do. But the only universal program remains Phoenix.

In the folder containing the program, you have to create or edit a file with the extension .bat according to this example:

PhoenixMiner.exe -pool etc-eu1.nanopool.org:19999 -wal 0xf4bb374444716ef33e47c98091ccd2d74a21e07835 -worker 1080ETC -epsw x -mode 1 -Rmode 1 -log 0 -mport 0 -etha 0 -retrydelay 1 -ftime 55 -tt 73 -tstop 89 -coin etc pause

• pool – the parameter is responsible for the pool address and port,
• wal – we specify a wallet,
• worker – we come up with a name for the ring in the statistics,
• tt – we specify the desired temperature of the video card under load,
• coin – tell the phoenix miner that we are mining Ethereum Classic.

Double click on the BAT file to start the miner. Wait about 20 seconds and press “S” to check the hashing speed. You will see something like this on your screen:

Once your miner is set up, you can just watch your equipment bring you revenue in the form of ETCs.

The above applies to Windows. Setting up mining Ethereum classic on Linux is different. We will talk about it in another article.

Paper wallet: appearance and properties

A paper wallet is a “cold”, i.e. offline way of storing cryptocurrency: paper with information printed on it, which gives the owner access to their crypto-assets.

The paper version of cryptocurrency storage is one of the safest. The principle of cryptocurrency allows you to save money in the form of a sheet with private and public access keys. It is technically impossible to break a wallet: it is only in the hands of the owner, and the only way to steal your cryptocurrencies is to gain access to a physical storage medium, i.e. a paper wallet.

Visually, a paper wallet can look like this:

Black and white squares – QR-codes with encrypted access keys. This is an optical label that is recognized by any smartphone using special software. They contain the necessary information: a private key to access the cryptocurrency and a public address for transactions with other users.

And if the public address is intended to be transferred to other users, the private key in any form should not know anyone but the owner of the wallet: it gives access to the wallet, and, accordingly, to all transactions with cash in the account.

What do you need a paper wallet for?

At first glance, an e-wallet is not a very necessary thing, because there are software and hardware wallets. But this is not the case. Thanks to the paper wallet, it is possible to receive a cryptocurrency payment even without a laptop or smartphone. You can also quickly get your money from any device. This way, with just a sheet of paper, you will retain control over your coins.

Now let’s see how it works on the example of the coin Ethereum Classic (ETC), because it is very popular, but, unlike Ethereum, a working manual for creating a paper wallet for it is very difficult to find.

How to create an ETC wallet?

To start, we need a PC or smartphone with Internet access, a printer and a paper. Your printer had better not be connected to a WAN.

There are manuals on the Web that explain how to create a paper wallet for Ethereum Classic using the official Ethereum wallet MyEtherWallet, but now they have lost relevance because this service has stopped working with ETC.

Now you need to use the web wallet: https://ethereumclassicwallet.com/, designed to work specifically with the Ethereum Classic. It allows you to quickly create a paper ETC wallet by following a few simple steps:

1. Go to the above resource. If you already have an ETC wallet, click: Unlock Wallet. Log in to your ETC wallet using one of the methods offered on the site. (If not, you must first create a wallet by clicking Create Wallet and following the instructions below).
2. In the wallet interface, click the Info icon.
3. Use your browser tools to take a screenshot of the data that appears in the pop-up window.
4. Save and, if necessary, print the resulting image.

As a result, you should get:

Important: keep your private key secret, unlike a public address, no one but you should see it! (The image above contains data from an existing zero-balance ETC wallet created for demonstration purposes only).

How to get access to your ETC coins with a paper wallet?

With a paper wallet, you can manage your money from any device, such as a newly purchased smartphone.

This requires:

1. Install an application from one of the multi-currency wallets that support ETC, such as Trust Wallet.
2. Select the ETC currency to create a wallet.
3. Select the I already have a wallet option.
4. Import a private key using a QR scanner.

That’s all! You have gained access to your existing ETC wallet and, accordingly, the funds on it on your new device.

What cryptocurrencies can be stored on a paper wallet?

Almost every coin can be stored this way. Bitcoin, all its forks (Gold, Diamond, Cash), Ethereum, Ripple, Monero, Litecoin and other key cryptocurrencies can be stored on paper wallets. The process of creating a wallet may be different from what was shown above, but the general logic of working with paper wallets will remain the same.

Comparison with hardware devices

The key advantage of a paper wallet is security. Your money will not be stolen by hackers, unless they break into your house and steal the key papers. In fact, you own cryptocurrencies physically.

A paper wallet is a so-called “cold” method of storage, the essence of which is that the private key is stored offline.

Paper wallets are one of the best ways to store a large number of cryptocurrencies, along with other “cold” storage options – hardware. This is primarily Trezor, Ledger Nano. When using them, access to the wallet and all operations with cryptocurrencies are performed inside a physical device, this is the difference between hardware storage.

A significant advantage of hardware storage methods: the private access key is not removed and generated inside the device. Accordingly, all transactions take place between wallets, only the electronic signature of the transaction interacts with the Internet. But the hardware storage method is significantly more expensive than a paper wallet: prices for the most popular models start at $ 70.