Kelley is your go-to for all things NFT!
Kelley is your go-to for all things NFT!
Storing Bitcoin and other cryptocurrencies safely and securely is something that needs careful thought. And so, in this article, we’ll be taking a look at both sides of the crypto wallet hardware vs software debate.
We’ll be exploring how crypto wallets work and taking a look at the various options. Join us as we dive into the world of safe cryptocurrency storage, and discover which wallet type is best for your circumstances. Should you choose a hardware or software crypto wallet? It’s time to find out!
When you purchase Bitcoin, or any other digital currency, there’s nothing tangible that you can actually touch. You keep your flat currency in bank and savings accounts, and although you can transfer these funds electronically, it’s possible to withdraw real cash that you can hold in your hand, and store in a physical wallet.
When you buy cryptocurrencies, there are no actual coins or notes that you can see. And even when you make a purchase, the digital currency itself is securely locked away within a blockchain ledger. So what you actually purchase is two keys – a public and a private key – which give you control over that asset. And it’s these keys which you need to store safely, as without them, your crypto becomes completely inaccessible.
The public key for your crypto asset operates in much the same way as your bank account number. It gives the exact location of the currency so that it can be identified in transactions. This is the information you’ll need to provide when moving or trading that asset.
Your private key, on the other hand, is much like your PIN, in that it’s restricted information that gives access to your funds. So if someone has both your public key and your private key, they effectively have control over your cryptocurrency. And since these markets are unregulated, there’s no way of recovering your money. So keeping those keys safe is absolutely essential!
If you’re only just embarking on your cryptocurrency journey, we’ve got everything you need right here at BitStacker.com to get started. Our comparison guides make it easy to narrow down your crypto-buying options, checking out our Trezor review, and discovering which are the best crypto exchanges for your needs. But the keys to your new crypto assets need to be safely stored somewhere – but where?
When you’re out of your comfort zone and everything seems unfamiliar, deciding whether you’d be better off with a hardware or software crypto wallet certainly isn’t going to be on your radar. And since most crypto exchanges offer the facility to store your crypto assets on their site, you might not be aware of the risks.
A crypto wallet is an absolute essential for anyone buying, investing or trading in Bitcoin and other cryptocurrencies. Hackers are extremely interested in crypto brokers and exchanges, simply because they tend to have access to huge stores of digital assets. So keeping your cryto on the site is leaving it exposed and vulnerable to attack.
Regardless of whether you choose a hardware or software crypto wallet, it’s absolutely essential to have one. Safe and secure storage for your public and private keys will ensure that only you can access your precious crypto portfolio.
Digital wallets come in two main types – either hardware or software. The option you’ll choose will be dictated by a number of factors, including:
There are advantages and disadvantages to both types of crypto wallet, so it’s not possible to state that one option is categorically better than the other. You’ll need to take a look at how each type of wallet operates, so that you can make up your own mind which crypto wallet might be best suited to your requirements.
We’ll begin our hardware vs software crypto wallet exploration with a close-up look at software wallets. These can be broken down into three variants:
When you sign up to a crypto exchange and buy some crypto, it’s stored within the site’s own wallet. It’s free and convenient, as your assets are right there ready to trade, if that’s what you want to do. Or maybe you’re just holding on for a while until you’ve tracked down the best crypto cloud mining sites to try? Whatever your reasons, you can confidently expect your exchange to take good care of your assets, can’t you?
It’s certainly true that any reputable exchange will have the highest levels of security in place, but they can’t necessarily guarantee that determined hackers won’t gain access to your public and private keys. Remember, it’s the person with the keys who has control of the cryptocurrency, so handing their care over to a third party isn’t necessarily the wisest thing to do, particularly if there’s a large sum of money at stake.
If you want to retain control of your public and private keys for your cryptocurrency, a downloadable software wallet is a better and safer option than an online wallet. Because, as we’ve already mentioned, whether you opt for a hardware or software crypto wallet, it should give you complete control of your public and private crypto keys. After all, that’s how you ensure that nobody apart from you can access your digital investments.
Many downloadable software crypto wallets are completely free, so there’s no reason not to give them a try. Some desktop wallets have been created specifically for one digital coin, whilst others allow you to store multiple cryptocurrencies. Bear in mind that many downloadable wallets charge transaction fees when you send or receive crypto, so that’s something that needs to be factored in when making a decision about which one to choose.
As the name suggests, mobile wallets are dedicated apps for Android, iOS or Windows devices, so that you can carry your crypto assets around with you wherever you go. These wallets are a great idea for investors who like to keep a tight control on their investments at all times, as they can be accessed from anywhere with a mobile signal.
Mobile wallets aren’t the safest though, due to the inherent portability of mobile devices. If someone steals your mobile, they have instant access to your crypto keys too, so this definitely isn’t a good option for anyone with a lot of money tied up in cryptocurrency.
In this section of our hardware vs software crypto wallet article, we’ll be concentrating on hardware wallets. These are physical devices that you can hold in your hand. And crucially, a hardware wallet isn’t connected to the internet, or held in the cloud, making it the safest way to store any digital assets.
Hardware wallets are available for every type of crypto investor, from the absolute beginner to the experienced trader. They tend to be expensive, although some budget models are available, but if you’re holding valuable crypto assets, paying extra to secure them is an extremely sensible route to go down.
The internet is teeming with viruses that have been created specifically to seek out private crypto keys and send them to hackers. That means software wallets are extremely vulnerable, with the need for regular updates in an attempt to stay one step ahead of the criminals. That’s not something you need to worry about when you use a hardware wallet, as your device isn’t connected to the internet.
In the crypto wallet hardware vs software debate, there’s no question that hardware wallets can’t be beaten on security. Once you understand how crypto hardware wallets work, it’s obvious that software wallets pose much more of a risk, due to the fact that they can so easily be accessed. But your hardware wallet is a completely separate device, that’s only connected very briefly to verify transactions.
Some of the best crypto hardware wallets don’t even need to connect to the internet at all. Digital displays on the device allow you to verify signatures and authorise transactions offline, using a QR code to transmit the data to the other party.
A software wallet might seem exceptionally convenient, as you can carry it around safely locked away in your laptop or handheld device. But if you should happen to lose your device, there’s the potential to lose your Bitcoin or altcoins too.
Hardware wallets can be as small as a USB drive, and even the biggest models could easily slip into a pocket or bag. So you can carry your crypto around with you, using it to complete transactions as needed. The important thing is that you have complete control over your private keys, and without those, your crypto can’t be accessed by anyone else.
So which option would be better for you – a hardware or software crypto wallet? That’s a decision only you can make, but here at BitStacker.com, we aim to make that process as easy and intuitive as possible. If you’re still on the fence, try answering the following questions, which should help to point you in the right direction:
If you’re only considering dipping your toes into the cryptocurrency waters to test the temperature, a high level of security won’t be your primary concern. An online wallet from your preferred exchange is fine for temporary storage of smaller amounts, but a downloadable wallet will give you a higher level of protection.
Larger crypto investments deserve a higher level of security. Although many software wallets use sophisticated technology to keep cryptocurrencies protected, they’re not foolproof. Hardware wallets offer a level of security and safety that simply can’t be achieved by software alone. A hardware wallet should be your go-to option if you hold, or intend to acquire, a large portfolio of crypto investments.
Bitcoin is the primary cryptocurrency that people think of when considering digital assets. It was the first crypto to be developed, so it’s had plenty of time to establish itself in people’s minds. But Bitcoin certainly isn’t the only option, with new cryptocurrencies constantly in development, while existing ones are being refined.
When deciding whether to go with a hardware or software crypto wallet, you’ll need to check which options are available for your preferred crypto. Try checking out the official website for the coin you’re interested in, as there’s often a wallet available directly from there. It won’t offer as much security as a hardware wallet though, so if you’re intending to purchase large amounts of any crypto, a hardware wallet is always the best option.
Casual investors will only be investing money they can afford to lose, so paying extra for security could be a step too far – at least during the early stages of crypto purchasing. A free software wallet is always going to sound like the better option in these situations, so be sure to look for the one that’s most suitable.
High-stakes investors and traders will have much larger sums of money invested in cryptocurrency., and keeping those assets safe will be of paramount importance. In this situation, a hardware wallet with top-level security features is absolutely essential. An option that never connects to the internet offers the absolute highest levels of protection, although this will add to the overall price.
Whether you decide on a hardware or software crypto wallet, make sure you select an option suitable for your level of experience. Paying a little extra for a high-security hardware wallet won’t be of much use if it’s too complicated to use! There are cryptocurrency wallets available for every level of experience, so whether you’ve been trading crypto for years, or you’re just about to start, there’s a wallet that’s perfect for your needs.
Now that we’ve come to the end of our crypto wallet hardware vs software comparison, you should have a better idea of which type is best for your purposes. We suggest considering your potential crypto needs over the coming months, so you can pick an option that allows your assets to grow, along with your knowledge.
Remember, here at BitStacker.com, we’re always on hand to answer your cryptocurrency questions. Whether you’re wondering ‘Is crypto mining profitable?’, or you want to learn about crypto leverage trading, our site is packed with useful information. So come and check out our Ledger review, discover which online casinos let you play with Bitcoin,, and see whether crypto mining could be for you. Call back regularly, as we’ve always got something new for you to discover!
Come and find out all about the two types of crypto wallets, and discover which one is right for you. We’ll explain the pros and cons of hardware and software wallets, so you can easily decide which one is best for storing your digital assets. Come and take a look!
Cryptocurrencies don’t operate in the same way as fiat currencies, with no intervention from banks or financial institutions to protect your interests. Come and find out what difference that makes to the safety and security of your crypto assets, and what you can do about it. If you don’t want to lose control of your crypto, you definitely need to come and read this!
Before you can determine what type of crypto wallet is right for you, you need to come and read this! Here at BitStacker.com we’ve got all the information you need to start buying, storing and trading cryptocurrencies with confidence. From the type of wallet that’s most suitable for you, to the best crypto mining platform for beginners, it’s all here. Come and see!