Paper Wallets are another very secure way to hold your Bitcoins, if done properly they can be the most secure method. The way a paper wallet works is you create your wallet on an offline computer that has never been connected to the internet. The best way to do this is use a Linux live cd (a live cd lets you boot another OS easily). If you don’t know how boot a live cd, at the minimum download the program and run it while being disconnected. But I dont recommend making a paper wallet on your regular computer as it is a huge risk to take. This makes it a lot harder for hackers to obtain the private keys to your Bitcoin wallet as the is no malware or keyloggers running in the shadows. Once you generate your wallet the next step is to print out the keys, private and public. My favorite program to make paper wallets is bitcoinpaperwallet, bitcoinpaperwallet takes an existing wallet generator and tweaks it. The changes are mainly to how the printed wallet will come out and also bitcoinpaperwallet is a little bit easier to use as there are less options. Once you print out your paper wallet your done, but make sure you protect it because if you lose it you lose access to your wallet. Some users like to put stickers that help show when it has been removed, I have never felt like I have to do this because no one in my household knows how to use Bitcoin and it never leaves my house. Paper wallets are a great way for beginners to practice strong security without committing to hardware. The greatest downside to paper wallets are that they aren’t really made for everyday wallets, they are better for long term storage or for gifts. If you want to securely hold Bitcoins without spending any money on hardware, paper wallets are for you.