Back to all

hardware-vs-software-wallet
Crypto

Hardware Vs. Software Wallet: Which Is Better?

<p><span style="font-weight: 400;">Hardware or software? Stuck on which wallet to use? Let's take a look at the factors you should consider when comparing hardware and software wallets. Armed with this knowledge, you can pick the crypto wallet that perfectly fits your needs. </span><span style="font-weight: 400;">As the cryptocurrency industry matures, its services and ecosystem have also evolved. More supportive infrastructure keeps coming online, ranging from exchanges to crypto wallets. Now, there are a variety of cryptocurrency wallets that crypto users can choose from.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Before we dig into hardware vs software wallet specifics, let's get a general overview of what a crypto wallet is and how you can use one.</span></p> <p>&nbsp;</p> <h2 id="what-exactly-are-crypto-wallets">What exactly are crypto wallets?</h2> <p><span style="font-weight: 400;">Crypto wallets are secure safes to store crypto assets. With a crypto wallet, you can store, send, and receive cryptocurrencies.&nbsp;</span><a href="https://wizardia.io/blog/what-is-blockchain"><span style="font-weight: 400;">The blockchain</span></a><span style="font-weight: 400;"> secures the data and privacy of all users through its software. However, crypto wallets grant users access to their assets. </span><span style="font-weight: 400;">There are mainly two types of crypto wallets: hardware wallets and software wallets. They vary in accessibility and storage options. A good understanding of both will help you choose.</span></p> <p>&nbsp;</p> <h2 id="what-are-hardware-wallets">What are Hardware Wallets?</h2> <p><span style="font-weight: 400;">Hardware wallets are physical devices used for storing private keys. They're also known as "cold wallets." A private key is a string of letters or numbers that becomes the passcode to your crypto funds. With a hardware wallet, you've got no worries about hackers. </span><span style="font-weight: 400;">However, your main concern should be about not losing the device. Because it's a physical device, if it's misplaced, you lose all your crypto assets.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Hardware wallets are the safest wallet option. Your crypto funds are more secure in these wallets than in any other. </span><span style="font-weight: 400;">As secure as hardware wallets are, they are less accessible. You'll have to connect them to a computer before you can access your digital assets. </span><span style="font-weight: 400;">Not so convenient, right? But what you lose in convenience, you make up for in security. By keeping access to your crypto assets away from the internet, you make them insusceptible to online hacking.</span></p> <p>&nbsp;</p> <p><strong>Analyzing hardware wallets</strong></p> <p><span style="font-weight: 400;">Cold storage wallets don't need internet servers. You store all your assets in your wallets, offline. It only allows access via a private key when the device is connected to a computer system. </span><span style="font-weight: 400;">Cyber-attacks become impossible since the crypto coins are stored offline. There's no involvement of a third party or access to the user's transaction history.&nbsp; </span><span style="font-weight: 400;">Hardware wallets have a range of security features to ensure the safety of your cryptocurrency keys. They have PIN protection and often include other security measures. Extra wallet features may include a screen for viewing transaction details and buttons to verify transactions manually.</span></p> <p>&nbsp;</p> <h2 id="best-hardware-wallets">Best Hardware Wallets</h2> <p>&nbsp;</p> <p><span style="font-weight: 400;"><picture><source srcset="https://wizardia.io/images/blog/thumb/2-unnamed.webp 576w, https://wizardia.io/images/blog/inner/2-unnamed.webp " type="image/webp"></source><source srcset="https://wizardia.io/images/blog/thumb/2-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/2-unnamed.jpg " type="image/jpg"></source><img srcset="https://wizardia.io/images/blog/thumb/2-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/2-unnamed.jpg " alt="An image of a Ledger Nano hardware wallet." loading="lazy" width="1600" height="1066"></picture></span></p> <p class="text-center" style="text-align: center;"><span style="font-weight: 400;">Image source: </span><a href="https://unsplash.com/photos/N4jhGAoNuGo"><span style="font-weight: 400;">UnSplash</span></a></p> <p>&nbsp;</p> <p><strong>Ledger Nano</strong></p> <p><span style="font-weight: 400;">This is considered to be the best hardware wallet. It comes in a USB-sized device. Ledger Nano supports more than 700 cryptocurrencies as a multi-cryptocurrency wallet. It integrates with various crypto software wallets. The crypto funds inside the wallet are stored offline, which means it's hard to hack.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Pros:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Top-notch security features</span></p> </li> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Has a recovery process to regain access</span></p> </li> </ul> <p><span style="font-weight: 400;">Cons:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Quite expensive</span></p> </li> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">No password manager</span></p> </li> </ul> <p>&nbsp;</p> <p><strong>Trezor</strong></p> <p>&nbsp;</p> <p><span style="font-weight: 400;"><picture><source srcset="https://wizardia.io/images/blog/thumb/3-unnamed.webp 576w, https://wizardia.io/images/blog/inner/3-unnamed.webp " type="image/webp"></source><source srcset="https://wizardia.io/images/blog/thumb/3-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/3-unnamed.jpg " type="image/jpg"></source><img srcset="https://wizardia.io/images/blog/thumb/3-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/3-unnamed.jpg " alt="An image of a Trezor hardware wallet on top of physical cryptocurrency." loading="lazy" width="1600" height="1068"></picture></span></p> <p class="text-center" style="text-align: center;">Image source: <a href="https://unsplash.com/photos/s1ZmirFOqOs">UnSplash</a></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Trezor hardware wallet is a USB-shaped wallet that supports several cryptocurrencies. It has a simple interface with a sleek design and is supported on major operating systems.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Pros:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Additional security via a randomly generated PIN</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Restricted access to third parties&nbsp;</span></li> </ul> <p><span style="font-weight: 400;">Cons:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">A bit overpriced</span></li> </ul> <p>&nbsp;</p> <p><strong>Pro Key</strong></p> <p><span style="font-weight: 400;">Pro Key hardware wallets have secure firmware that can be trusted and is easy to use for all users. It's still a new wallet in the crypto market.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Pros:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Supports several cryptocurrencies and is highly secure</span></li> </ul> <p><span style="font-weight: 400;">Cons:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Still new to the market</span></li> </ul> <p>&nbsp;</p> <p><span style="font-weight: 400;">For the sake of clarity, hardware wallets are not 100% safe. Recently, there was a security incident where hackers got into the Ledger hardware wallet manufacturer's servers. They possibly injected malicious firmware updates into Ledger wallets. Still, these kinds of supply chain attacks are a lot harder to achieve than phishing scams.</span></p> <p>&nbsp;</p> <h2 id="what-are-software-wallets">What are software wallets?</h2> <p>&nbsp;</p> <p><span style="font-weight: 400;"><picture><source srcset="https://wizardia.io/images/blog/thumb/5-unnamed.webp 576w, https://wizardia.io/images/blog/inner/5-unnamed.webp " type="image/webp"></source><source srcset="https://wizardia.io/images/blog/thumb/5-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/5-unnamed.jpg " type="image/jpg"></source><img srcset="https://wizardia.io/images/blog/thumb/5-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/5-unnamed.jpg " alt="An image of a laptop computer with a cryptocurrency trading site on the screen." loading="lazy" width="1600" height="1066"></picture></span></p> <p class="text-center" style="text-align: center;"><span style="font-weight: 400;">Image source: </span><a href="https://unsplash.com/photos/744oGeqpxPQ"><span style="font-weight: 400;">UnSplash</span></a></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Software wallets store crypto assets on a computer's hard drive. They are known as "hot wallets," and are easily accessible. You can download them as applications on your devices when connected to the Internet. </span><span style="font-weight: 400;">Software wallets have a simple user interface. Access is restricted only to the user who has the correct private keys.</span></p> <p>&nbsp;</p> <p><strong>Analyzing Software Wallets</strong></p> <p><span style="font-weight: 400;">Software wallets are digital wallets that you can easily download on your devices. You can simply download them as applications over the internet. There's a recovery phrase you need to help restore your cryptocurrency holdings in case you forgot your password, lost your mobile device, or got hacked. </span><span style="font-weight: 400;">Between hardware and software wallets, software wallets are easy to access and user-friendly. </span><span style="font-weight: 400;">Software wallets have a private key and a public key to help users access their wallets. They also allow other users over the crypto market to transact with the wallet owner. </span><span style="font-weight: 400;">If you lose your wallet's private keys, you can still regain access to your online wallets. There's a two-step verification process for extra security. The private keys keep your assets from security breaches.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Most software wallets on crypto exchanges are prone to hacking. Many crypto holders tend to lose their funds when they hunt for </span><a href="https://wizardia.io/blog/what-is-airdrop-crypto-and-how-to-get-it"><span style="font-weight: 400;">crypto aidrops</span></a><span style="font-weight: 400;"> that end up being scams. This happens mostly with software wallets. </span><span style="font-weight: 400;">The fact that the software wallet is on the blockchain ensures the safety of your assets.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Most exchanges offer free use of their software wallet. You still have the right to choose between a hosted or a self-custody wallet.&nbsp;</span></p> <p>&nbsp;</p> <h2 id="software-wallet-options">Software Wallet Options</h2> <p><span style="font-weight: 400;">Software wallets are available in three main forms: mobile, desktop, and online.</span></p> <p>&nbsp;</p> <p><strong>Mobile Wallets</strong></p> <p><span style="font-weight: 400;">A mobile wallet is a kind of software wallet that users can access via an app on their mobile phone anywhere. It is only wise to store a limited amount of cryptocurrencies in these wallets. The reason is their susceptibility to hacks, theft, malware or viral attacks, as well as the risk of&nbsp; device loss.</span></p> <p>&nbsp;</p> <p><strong>Desktop Wallets</strong></p> <p><span style="font-weight: 400;">With desktop wallets, you store your digital currencies on a desktop or PC. It's worth noting that many traders prefer this type of wallet. A desktop wallet has the finest control without any third-party interface. </span><span style="font-weight: 400;">However, security remains an issue, because it can be hacked.</span></p> <p>&nbsp;</p> <p><strong>Online Wallets</strong></p> <p><span style="font-weight: 400;">Online Wallets are web-based software wallets that you can access from any device, anywhere. As suitable as this option is, its major downside is that these wallets store private keys online. </span><span style="font-weight: 400;">They are controlled by a third party, and they are highly susceptible to online hacks and scams. However, they are great for crypto trading.</span></p> <p>&nbsp;</p> <p><strong>Paper Wallets</strong></p> <p><span style="font-weight: 400;">Paper wallets are one of the safest software wallets used to store crypto funds. It's a software wallet program that produces a set of public and private keys. These keys are printed on a piece of paper together with a qr code and kept offline. If you lose the piece of paper, you also lose access to your funds. </span><span style="font-weight: 400;">Paper wallets can be quite hard to use. Before you can spend your tokens, you need to import your private key into software or an online wallet. Also if your paper wallet gets burned or destroyed, your tokens are toast.</span></p> <p>&nbsp;</p> <h2 id="best-software-wallets">Best Software Wallets</h2> <p><strong>MetaMask</strong></p> <p><span style="font-weight: 400;">MetaMask is user friendly with quick access to several tokens on different blockchain networks. It supports Web3 networks such as Avalanche, Binance Smart Chain, and Polygon. MetaMask wallet stores NFTs, which means it's a great place to store your </span><a href="https://wizardia.io/blog/what-is-an-nft-and-how-does-it-work"><span style="font-weight: 400;">Wizardia NFTs.</span></a><span style="font-weight: 400;"> Users have full control of their private keys. All account information is encrypted and stored locally. No user's information ever touches the MetaMask servers.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Pros:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Intuitive user interface design on its browser extension and app</span></p> </li> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Links directly to NFT marketplaces</span></p> </li> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Supports numerous dApps</span></p> </li> </ul> <p><span style="font-weight: 400;">Cons:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Fees to purchase Ether can be high</span></p> </li> <li style="font-weight: 400;" aria-level="1"> <p><span style="font-weight: 400;">Cannot store Bitcoin directly</span></p> </li> </ul> <p>&nbsp;</p> <p><strong>Coinbase Wallet</strong></p> <p>&nbsp;</p> <p><span style="font-weight: 400;"><picture><source srcset="https://wizardia.io/images/blog/thumb/4-unnamed.webp 576w, https://wizardia.io/images/blog/inner/4-unnamed.webp " type="image/webp"></source><source srcset="https://wizardia.io/images/blog/thumb/4-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/4-unnamed.jpg " type="image/jpg"></source><img srcset="https://wizardia.io/images/blog/thumb/4-unnamed.jpg 576w, https://wizardia.io/images/blog/inner/4-unnamed.jpg " alt="An image of a mobile phone open to the coinbase app." loading="lazy" width="1600" height="1068"></picture></span></p> <p class="text-center" style="text-align: center;"><span style="font-weight: 400;">Image source: </span><a href="https://unsplash.com/photos/6h346k870kg"><span style="font-weight: 400;">UnSplash</span></a></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">The Coinbase wallet is considered the best software wallet for beginners. It's an intuitive, easy-to-navigate, and high-security software wallet. It can also store NFTs and digital collectibles while supporting over 200 cryptocurrencies.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Pros:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">User-friendly and intuitive interface</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Multi-signature and 2FA security support</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Backed by a notable trading platform with the capacity to recoup lost or stolen assets</span></li> </ul> <p><span style="font-weight: 400;">Cons:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Existing security issues and weak points</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Available only on mobile and tablet devices (except for the Chrome extension)</span></li> </ul> <p>&nbsp;</p> <p><strong>Guarda Wallet</strong></p> <p><span style="font-weight: 400;">Guarda Wallet is one of the safest software wallets you can get. This user-friendly cryptocurrency wallet allows you to buy, store, swap, and earn via staking a few crypto assets. With Guarda wallet, you get to </span><a href="https://wizardia.io/blog/what-is-staking-crypto"><span style="font-weight: 400;">stake tokens</span></a><span style="font-weight: 400;"> and earn passive income. </span><span style="font-weight: 400;">The multi-platform software wallet gives users access via a web interface, a Chrome browser extension, a desktop client, or a smartphone. Guarda wallet enables seamless cryptocurrency asset management for all users.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Pros:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">High level of security with multi-signature wallets</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Supports over 400k digital assets</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Responsive customer service and Face ID authentication for mobile</span></li> </ul> <p><span style="font-weight: 400;">Cons:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">High fees for in-app crypto purchases</span></li> </ul> <p>&nbsp;</p> <h2 id="hardware-or-software-wallet">Hardware or Software Wallet?</h2> <p><span style="font-weight: 400;">Hardware wallets are safer than software wallets because of their offline features. They have no dependency on a third party. Hardware wallets are more secure from all malware attacks and asset loss. </span><span style="font-weight: 400;">If your hardware wallet is missing, stolen, or damaged, you can still recover your crypto assets. However, ensure that you have access to the 12, 18, or 24-word recovery seed. </span><span style="font-weight: 400;">All your digital currency is stored on the collective blockchain network. The hardware wallet keeps the recovery seed. You can back it up offline, on paper, or better still, on a stainless steel recovery seed backup device. </span><span style="font-weight: 400;">Compared to software wallets, a hardware wallet lasts longer without much change to its system, justifying its higher cost.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Software wallets are convenient and easy to use for beginners. However, you shouldn't keep your assets there for too long. Be wary of hacking and other cyber threats.</span></p> <p>&nbsp;</p> <p><picture><source srcset="https://wizardia.io/images/blog/thumb/1920x1080-visual-for-blog-article-2-2.webp 576w, https://wizardia.io/images/blog/inner/1920x1080-visual-for-blog-article-2-2.webp " type="image/webp"></source><source srcset="https://wizardia.io/images/blog/thumb/1920x1080-visual-for-blog-article-2-2.jpg 576w, https://wizardia.io/images/blog/inner/1920x1080-visual-for-blog-article-2-2.jpg " type="image/jpg"></source><img srcset="https://wizardia.io/images/blog/thumb/1920x1080-visual-for-blog-article-2-2.jpg 576w, https://wizardia.io/images/blog/inner/1920x1080-visual-for-blog-article-2-2.jpg " alt="An image with a table consisting of three columns left to right: Features, Hardware wallet, Software wallet. The elements are as follows: Security - More secure - Safe but susceptible; Storage device - USB-sized physical device - Locally, in personal devices; Price - More expensive - Very cheap, mostly free; Accessibility - Limited - Maximum, anytime & anywhere; Convenience - Not so convenient - More convenient; Cyber attacks - Low susceptibility - High susceptibility; Wallet type - Cold wallet - Hot wallet; Third-Party - No involvement - Third party allowed." loading="lazy" width="1920" height="1080"></picture></p> <p>&nbsp;</p> <h2 id="final-thoughts">Final Thoughts</h2> <p><span style="font-weight: 400;">So what's your final decision? Hardware wallet or software wallet? Remember that they both have their merits and demerits. It solely depends on your needs and preferences to choose the right wallet.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">A hardware wallet is recommended if you prefer to have absolute control over your crypto holdings. Also, if security is a major concern for you without being bothered by its limited accessibility, then a hardware wallet is the best. </span><span style="font-weight: 400;">On the flip side, software wallets are perfect for users who may need their crypto tokens anywhere, anytime. If you are interested in crypto trading, you need a software wallet rather than a hardware wallet. </span><span style="font-weight: 400;">A compromise is to split your crypto holdings, and save some in a hardware wallet. Trade with the remaining crypto assets in a software wallet.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">Now you're armed with the knowledge to make a smart decision when choosing the best wallet for your </span><a href="https://wizardia.io/nft-sale"><span style="font-weight: 400;">Wizardia tokens and NFTs</span></a><span style="font-weight: 400;">. But be careful with the kind of online exchange platforms you use, especially if you are storing your assets there.</span></p> <p>&nbsp;</p> <p><span style="font-weight: 400;">The crypto world keeps evolving, and more crypto wallets with advanced features will hit the market. Will there be one without tradeoffs, satisfying every need? Time will tell.</span></p> <p>&nbsp;</p> <h2 id="faqs">FAQs</h2> <p><strong>Is a hardware wallet better than a software wallet?</strong></p> <p><span style="font-weight: 400;">A hardware wallet is generally considered safer because its software allows the user to store its contents offline. It only allows access via private keys when connected to a computer.</span><span style="font-weight: 400;">&nbsp;&nbsp;</span></p> <p>&nbsp;</p> <p><strong>What is the difference between Hardware Wallets and Software Wallets</strong></p> <p><span style="font-weight: 400;">The main difference between hardware and software wallets is that hardware wallets are physical devices that store private keys while software wallets exist locally within a computer or device.</span></p> <p>&nbsp;</p> <p><strong>Are hardware wallets safe?</strong></p> <p><span style="font-weight: 400;">Hardware wallets are safe to use for storing crypto assets. Hardware wallets store private keys offline, so they are secure.&nbsp;</span></p> <p>&nbsp;</p> <p><strong>Are software wallets safe?</strong></p> <p><span style="font-weight: 400;">Yes, although to a lesser degree than hardware wallets. Software wallets are prone to cyber attacks, scams, computer failure, theft, or loss of access keys.</span></p> <p>&nbsp;</p> <p><strong>Are hardware wallets worth it?</strong></p> <p><span style="font-weight: 400;">The layers of security hardware wallets provide make them costly, but worth the price.</span></p> <p>&nbsp;</p> <p><strong>Are software wallets free?</strong></p> <p><span style="font-weight: 400;">Yes, they are free. Simply sign up and create as many online wallets as you need. Good examples are Metamask, Trust Wallet, CoinBase, among others.</span></p>

10 min read
Aug 10, 2022
Kayode Iwamoyo
Read this article

Hardware or software? Stuck on which wallet to use? Let’s take a look at the factors you should consider when comparing hardware and software wallets. Armed with this knowledge, you can pick the crypto wallet that perfectly fits your needs. As the cryptocurrency industry matures, its services and ecosystem have also evolved. More supportive infrastructure keeps coming online, ranging from exchanges to crypto wallets. Now, there are a variety of cryptocurrency wallets that crypto users can choose from.

 

Before we dig into hardware vs software wallet specifics, let’s get a general overview of what a crypto wallet is and how you can use one.

 

What exactly are crypto wallets?

Crypto wallets are secure safes to store crypto assets. With a crypto wallet, you can store, send, and receive cryptocurrencies. The blockchain secures the data and privacy of all users through its software. However, crypto wallets grant users access to their assets. There are mainly two types of crypto wallets: hardware wallets and software wallets. They vary in accessibility and storage options. A good understanding of both will help you choose.

 

What are Hardware Wallets?

Hardware wallets are physical devices used for storing private keys. They’re also known as "cold wallets." A private key is a string of letters or numbers that becomes the passcode to your crypto funds. With a hardware wallet, you’ve got no worries about hackers. However, your main concern should be about not losing the device. Because it’s a physical device, if it’s misplaced, you lose all your crypto assets.

 

Hardware wallets are the safest wallet option. Your crypto funds are more secure in these wallets than in any other. As secure as hardware wallets are, they are less accessible. You’ll have to connect them to a computer before you can access your digital assets. Not so convenient, right? But what you lose in convenience, you make up for in security. By keeping access to your crypto assets away from the internet, you make them insusceptible to online hacking.

 

Analyzing hardware wallets

Cold storage wallets don’t need internet servers. You store all your assets in your wallets, offline. It only allows access via a private key when the device is connected to a computer system. Cyber-attacks become impossible since the crypto coins are stored offline. There’s no involvement of a third party or access to the user’s transaction history.  Hardware wallets have a range of security features to ensure the safety of your cryptocurrency keys. They have PIN protection and often include other security measures. Extra wallet features may include a screen for viewing transaction details and buttons to verify transactions manually.

 

Best Hardware Wallets

 

An image of a Ledger Nano hardware wallet.

Image source: UnSplash

 

Ledger Nano

This is considered to be the best hardware wallet. It comes in a USB-sized device. Ledger Nano supports more than 700 cryptocurrencies as a multi-cryptocurrency wallet. It integrates with various crypto software wallets. The crypto funds inside the wallet are stored offline, which means it’s hard to hack.

 

Pros:

  • Top-notch security features

  • Has a recovery process to regain access

Cons:

  • Quite expensive

  • No password manager

 

Trezor

 

An image of a Trezor hardware wallet on top of physical cryptocurrency.

Image source: UnSplash

 

Trezor hardware wallet is a USB-shaped wallet that supports several cryptocurrencies. It has a simple interface with a sleek design and is supported on major operating systems.

 

Pros:

  • Additional security via a randomly generated PIN
  • Restricted access to third parties 

Cons:

  • A bit overpriced

 

Pro Key

Pro Key hardware wallets have secure firmware that can be trusted and is easy to use for all users. It's still a new wallet in the crypto market.

 

Pros:

  • Supports several cryptocurrencies and is highly secure

Cons:

  • Still new to the market

 

For the sake of clarity, hardware wallets are not 100% safe. Recently, there was a security incident where hackers got into the Ledger hardware wallet manufacturer’s servers. They possibly injected malicious firmware updates into Ledger wallets. Still, these kinds of supply chain attacks are a lot harder to achieve than phishing scams.

 

What are software wallets?

 

An image of a laptop computer with a cryptocurrency trading site on the screen.

Image source: UnSplash

 

Software wallets store crypto assets on a computer’s hard drive. They are known as "hot wallets," and are easily accessible. You can download them as applications on your devices when connected to the Internet. Software wallets have a simple user interface. Access is restricted only to the user who has the correct private keys.

 

Analyzing Software Wallets

Software wallets are digital wallets that you can easily download on your devices. You can simply download them as applications over the internet. There’s a recovery phrase you need to help restore your cryptocurrency holdings in case you forgot your password, lost your mobile device, or got hacked. Between hardware and software wallets, software wallets are easy to access and user-friendly. Software wallets have a private key and a public key to help users access their wallets. They also allow other users over the crypto market to transact with the wallet owner. If you lose your wallet’s private keys, you can still regain access to your online wallets. There’s a two-step verification process for extra security. The private keys keep your assets from security breaches.

 

Most software wallets on crypto exchanges are prone to hacking. Many crypto holders tend to lose their funds when they hunt for crypto aidrops that end up being scams. This happens mostly with software wallets. The fact that the software wallet is on the blockchain ensures the safety of your assets.

 

Most exchanges offer free use of their software wallet. You still have the right to choose between a hosted or a self-custody wallet. 

 

Software Wallet Options

Software wallets are available in three main forms: mobile, desktop, and online.

 

Mobile Wallets

A mobile wallet is a kind of software wallet that users can access via an app on their mobile phone anywhere. It is only wise to store a limited amount of cryptocurrencies in these wallets. The reason is their susceptibility to hacks, theft, malware or viral attacks, as well as the risk of  device loss.

 

Desktop Wallets

With desktop wallets, you store your digital currencies on a desktop or PC. It’s worth noting that many traders prefer this type of wallet. A desktop wallet has the finest control without any third-party interface. However, security remains an issue, because it can be hacked.

 

Online Wallets

Online Wallets are web-based software wallets that you can access from any device, anywhere. As suitable as this option is, its major downside is that these wallets store private keys online. They are controlled by a third party, and they are highly susceptible to online hacks and scams. However, they are great for crypto trading.

 

Paper Wallets

Paper wallets are one of the safest software wallets used to store crypto funds. It’s a software wallet program that produces a set of public and private keys. These keys are printed on a piece of paper together with a qr code and kept offline. If you lose the piece of paper, you also lose access to your funds. Paper wallets can be quite hard to use. Before you can spend your tokens, you need to import your private key into software or an online wallet. Also if your paper wallet gets burned or destroyed, your tokens are toast.

 

Best Software Wallets

MetaMask

MetaMask is user friendly with quick access to several tokens on different blockchain networks. It supports Web3 networks such as Avalanche, Binance Smart Chain, and Polygon. MetaMask wallet stores NFTs, which means it’s a great place to store your Wizardia NFTs. Users have full control of their private keys. All account information is encrypted and stored locally. No user's information ever touches the MetaMask servers.

 

Pros:

  • Intuitive user interface design on its browser extension and app

  • Links directly to NFT marketplaces

  • Supports numerous dApps

Cons:

  • Fees to purchase Ether can be high

  • Cannot store Bitcoin directly

 

Coinbase Wallet

 

An image of a mobile phone open to the coinbase app.

Image source: UnSplash

 

The Coinbase wallet is considered the best software wallet for beginners. It’s an intuitive, easy-to-navigate, and high-security software wallet. It can also store NFTs and digital collectibles while supporting over 200 cryptocurrencies.

 

Pros:

  • User-friendly and intuitive interface
  • Multi-signature and 2FA security support
  • Backed by a notable trading platform with the capacity to recoup lost or stolen assets

Cons:

  • Existing security issues and weak points
  • Available only on mobile and tablet devices (except for the Chrome extension)

 

Guarda Wallet

Guarda Wallet is one of the safest software wallets you can get. This user-friendly cryptocurrency wallet allows you to buy, store, swap, and earn via staking a few crypto assets. With Guarda wallet, you get to stake tokens and earn passive income. The multi-platform software wallet gives users access via a web interface, a Chrome browser extension, a desktop client, or a smartphone. Guarda wallet enables seamless cryptocurrency asset management for all users.

 

Pros:

  • High level of security with multi-signature wallets
  • Supports over 400k digital assets
  • Responsive customer service and Face ID authentication for mobile

Cons:

  • High fees for in-app crypto purchases

 

Hardware or Software Wallet?

Hardware wallets are safer than software wallets because of their offline features. They have no dependency on a third party. Hardware wallets are more secure from all malware attacks and asset loss. If your hardware wallet is missing, stolen, or damaged, you can still recover your crypto assets. However, ensure that you have access to the 12, 18, or 24-word recovery seed. All your digital currency is stored on the collective blockchain network. The hardware wallet keeps the recovery seed. You can back it up offline, on paper, or better still, on a stainless steel recovery seed backup device. Compared to software wallets, a hardware wallet lasts longer without much change to its system, justifying its higher cost.

 

Software wallets are convenient and easy to use for beginners. However, you shouldn’t keep your assets there for too long. Be wary of hacking and other cyber threats.

 

An image with a table consisting of three columns left to right: Features, Hardware wallet, Software wallet. The elements are as follows: Security - More secure - Safe but susceptible; Storage device - USB-sized physical device - Locally, in personal devices; Price - More expensive - Very cheap, mostly free; Accessibility - Limited - Maximum, anytime & anywhere; Convenience - Not so convenient - More convenient; Cyber attacks - Low susceptibility - High susceptibility; Wallet type - Cold wallet - Hot wallet; Third-Party - No involvement - Third party allowed.

 

Final Thoughts

So what’s your final decision? Hardware wallet or software wallet? Remember that they both have their merits and demerits. It solely depends on your needs and preferences to choose the right wallet.

 

A hardware wallet is recommended if you prefer to have absolute control over your crypto holdings. Also, if security is a major concern for you without being bothered by its limited accessibility, then a hardware wallet is the best. On the flip side, software wallets are perfect for users who may need their crypto tokens anywhere, anytime. If you are interested in crypto trading, you need a software wallet rather than a hardware wallet. A compromise is to split your crypto holdings, and save some in a hardware wallet. Trade with the remaining crypto assets in a software wallet.

 

Now you’re armed with the knowledge to make a smart decision when choosing the best wallet for your Wizardia tokens and NFTs. But be careful with the kind of online exchange platforms you use, especially if you are storing your assets there.

 

The crypto world keeps evolving, and more crypto wallets with advanced features will hit the market. Will there be one without tradeoffs, satisfying every need? Time will tell.

 

FAQs

Is a hardware wallet better than a software wallet?

A hardware wallet is generally considered safer because its software allows the user to store its contents offline. It only allows access via private keys when connected to a computer.  

 

What is the difference between Hardware Wallets and Software Wallets

The main difference between hardware and software wallets is that hardware wallets are physical devices that store private keys while software wallets exist locally within a computer or device.

 

Are hardware wallets safe?

Hardware wallets are safe to use for storing crypto assets. Hardware wallets store private keys offline, so they are secure. 

 

Are software wallets safe?

Yes, although to a lesser degree than hardware wallets. Software wallets are prone to cyber attacks, scams, computer failure, theft, or loss of access keys.

 

Are hardware wallets worth it?

The layers of security hardware wallets provide make them costly, but worth the price.

 

Are software wallets free?

Yes, they are free. Simply sign up and create as many online wallets as you need. Good examples are Metamask, Trust Wallet, CoinBase, among others.

Kayode Iwamoyo

Kayode Iwamoyo

Kayode Iwamoyo is a Web3 SEO Copywriter whose vision is to help people get the best out of blockchain technology. He educates, excites, and enlightens with his posts.

FOR THE BEST INVESTMENT OPPORTUNITIES, JOIN OUR COMMUNITY

Discord
61,580
Twitter
123,595
Telegram
36,202
TikTok
154,300
Email
196,879

Avoid scam, check official Wizardia links

MY CART

Your cart is currently empty