The night was going well. We went out at Broadbeach, had some excellent ginger beer in a fine establishment, caught up on the tea, took some selfies because we were looking fly. Little did we know we were in the path of a Bitcoin paper wallet scam.
Then, as we left and crossed the road to gawk at the moon over the beach, my friend bent down to pick up an item from the grass. And with that, she was nearly part of a crypto scam.
What she picked up was a piece of paper inside a plastic cover. It supposedly contained the password to an online wallet that held $16,000 worth of Bitcoin. It had a QR code on it that apparently gave access to said wallet. And it had a password to access the Bitcoin in the wallet.
With some delicious ginger beer on board, my friend held up her phone to scan the paper wallet.
Lucky for me I had been drinking non-alcoholic ginger beer. So, before my mate scanned anything, I took it from her and had a look at the paper wallet. Being a crypto journo has its uses, and I was immediately suss. As it turned out, it was indeed a scam.
The thing is, it was a good scam. This is because a Bitcoin paper wallet is definitely a thing, and if you do drop a real one, then you are at risk of someone else cleaning out your crypto.
What is a Bitcoin paper wallet?
A Bitcoin paper wallet is a physical piece of paper that holds the information you need to access your Bitcoin. This paper has two important things on it:
Public Key: This is like your username or public address. You give this to people when you want them to send you Bitcoin. It’s like giving your bank details when you want to get paid.
Private Key: This is a password that only you should know. You should never share it with anyone, as it’s the only way to open and access your Bitcoin. If someone else gets your private key, they can take your Bitcoin.
The idea is that once your Bitcoin is in your digital wallet, you write the password elsewhere or store it in your phone and destroy the original paper wallet.
Paper wallets are cheap and easy to create, but if you are dumb enough to drop it in a sink full of water, or lose it somewhere, then your crypto could be toast.
What if you drop it on a beach at the Gold Coast? Finder keepers, loser weepers. Unless you are being scammed.
How does the hustle work?
People have been scammed out of cash by falling for the paper “cryptocurrency wallets” they’ve found.
If the finder picks it up, thinking it might be worth something, and scans the code with their phone, they could see their digital wallet emptied.
While the person thinks they are about to access a digital wallet with $16,000 in it, the finder must pay a “withdrawal fee” to get the money transferred into their own crypto account, if they have one.
Once the withdrawal fee is paid and the person’s crypto wallet details provided, the person’s cryptocurrency is stolen from their crypto wallets.
So if you see one of these paper wallets on the ground, put it in the bin and get on with the rest of your day.