Hardware vs Software Wallet – Are you wondering which is the best Wallet? Want to know which wallet offers best options? You’re at the right place! In this article, I’ll show you a detailed Hardware and Software Wallet comparison which will help you to select the best option.
With a crypto wallet, you can be able to store your coins for easy and simple repossession as and when you require them. The wallets connect with the blockchain network to complete transactions, receiving and sending digital assets with the approval of the private keys stores within.
Hardware vs Software Wallet
There are various kinds of wallets available, and below guide will show you the difference between Hardware vs Software wallet. Before getting into the details, first of all, let us know what is Crypto Wallet.
What is a Crypto Wallet?
Crypto Wallers are used to send and receive, store popular digital currencies like bitcoin. Usually, most coins have a wallet of their own or a recommended third-party wallet. These are normally measured to be a safer option than cryptocurrency exchanges. So, it is always recommended using a wallet to store the remaining assets.
Hardware vs Software Wallet: What are they?
Hardware Wallets
Hardware wallets are also called as cold storage. These are physical device which are used to store the private keys for your crypto. These are entirely different from online exchange platforms like Binance. In order to access your holdings, you have to connect the hardware wallet to your computer.
Once you access the cryptocurrency, you can be able to store the cryptocurrency there, and it will not be stored on an online server any longer. This means, from then onwards the person with the hardware wallet and its pin can only be able to have access to the private keys.
Furthermore, it is the most secure process of holding cryptocurrency. They also have several advantages like, you’re in total control of the crypto held on the hardware wallet. Unlike software wallet, there is no need to trust an external entity which is susceptible to security breaches. Even you lose the hardware wallet, you can simply restore your holdings to a new wallet.
Hardware wallets are quite expensive, but the peace of mind for the additional security is often worth it. Also, it is recommended to avoid keeping your crypto on the same hardware wallet for the long time for safety reasons.
Software Wallets
As the name says, software wallets are non-physical programs which you can easily download on your computer to hold your crypto. Just like hardware, you can be able to recover or restore your cryptocurrency holdings by simply using a recovery phase in the incident where you happen to lose your wallet, forgot the password or got hacked.
Also, as software wallets are associated with the internet, there is a chance that they can be extremely susceptible to virus or malware that might target it. Any recovered password or code can also be seen and eventually retrieved by a hacker. There are available in different forms: mobile, desktop and online.
Mobile Wallets
Mobile Wallets can be accessible via an app on your mobile phone can be accessed anywhere. Whereas one type of app stores your coins on your phone, the other provides you access to online storage servers. It is recommended to store a limited amount of digital currency on these wallets.
Desktop Wallets
You can store your currency on a desktop or PC. Many traders prefer this type of wallet as it offers the finest control without a third-party interface. However, security can be an issue as it is entirely up to you to protect your coins.
Online Wallets
Online Wallets are web-based wallets which can be accessed from any device, from anywhere. Even though this option is very suitable, the major downside is that these wallets store the private keys online and are controlled by a third party which makes them quite susceptible to hacking and scam.
Read: Trust Wallet vs MetaMask
The Bottom Line
What did you choose? Hardware nod software wallets have their advantages and disadvantages. It entirely depends on your needs and preferences to select the right wallet. If you ask me, I would recommend hardware wallet if you want to have complete control and security over your crypto holdings.
Whereas, software wallets are suitable for people who want to use crypto from anywhere, anytime. So, I hope the above article on Hardware vs Software Wallet has helped you to select the best option.
FAQs
Is a hardware wallet better than a software wallet?
Hardware and software wallets are created to make your crypto storage options more secure. It entirely depends on your requirement and preferences.
Are hardware wallets safe?
Hardware wallets have an associated desktop, mobile or web applications which allow you to monitor your bitcoin addresses and spend bitcoins.
Are software bitcoin wallets safe?
Yes. However, users can lose bitcoin and other cryptocurrency as a result of computer failure, theft, loss of access key.