The Difference Between Hardware and Software Wallets
The Difference Between Hardware and Software Wallets
The question of how to properly secure your personal digital assets is probably one of the most important subjects to understand when you start your journey with cryptocurrency. While virtual currencies were treated far less seriously just over a decade ago, the surge of value they have mustered up to this point makes the subject of crypto security vitally important to holders and traders, alike.
The fact that cryptocurrency is decentralised means that there is no central bank available to store your funds. The safekeeping of your currency relies solely on you. Fortunately, the market has grown in leaps and bounds and there are now some tremendous wallets at your disposal to help you store, access, and use your digital assets conveniently.
Join us, as we objectively explore and compare three of the most popular types of crypto-wallets available right now.
A Summary for Your Convenience
Custodial Software Wallet | Non-Custodial Software Wallet | Hardware Wallet | |
---|---|---|---|
Primary quality | Provides ease of use and requires less responsibility in the safekeeping of your funds | Full control of the public and the private keys from software on PC or mobile | Full control of the public or the private key from un-hackable hardware device. |
Usage | Great for beginners or those who make and receive frequent payments | Long term use for serious traders and investors | Long term use for serious traders and investors also called Hodlers |
How keys are stored | The custodian/exchange owns the private keys to your crypto | Your keys are encrypted and stored in the software | Your keys are stored on a hardware device which in turn can communicate with dedicated software on your PC |
Coin storage | Limited to coins covered by the exchange | Can store most cryptocurrencies but it’s dependent on the software you use | Top devices can store 1500+ different currencies at once |
Possible risk | The exchange going out of business or a mass server breach | Malicious malware or hackers & negligence | Risk of losing your private keys linked to the Hardware Wallet. |
Cost | Transaction fees are dependent on the amount being traded | Once off or monthly cost for the software, in some cases the software is free but charges Swap or transaction fees. | Once off purchase of hardware. |
Here at Bitmart, we are dedicated to making sure that our customers not only receive the best goods their money can buy, but also all the information they need to make the right decisions to suit them best.
We hope that you have found our comparison of Hardware and Software wallets helpful and can now adequately weigh the pros and cons of each option to make a better-informed choice for your future in the crypto realm.