Hardware vs. Online Cryptocurrency Wallets Compared
Hardware and online cryptocurrency wallets are two of the most common options for storing and accessing your crypto assets. With security more of an issue than ever before, it’s imperative to understand which is the safest kind of cryptocurrency wallet.
A recent study on crypto fraud revealed that about 13,000 investors fell victim to scammers and lost a total of $11 million over a 4-year period from 2013-2017. Selecting the most secure place for your crypto assets must be your first priority when deciding which wallet to use.
Differences between hardware and online cryptocurrency wallets
Cryptocurrency wallets range from hardware storage devices that fit in the palm of your hand to user-friendly websites with seamless user interface.
Two of the most common wallets are hardware (offline devices) and online (web-based) cryptocurrency wallets. It’s important to understand the essential features that differentiate these wallet types.
Hardware wallets and cold storage
Hardware wallets are physical devices that resemble a flash drive and are separate from online cryptocurrency exchange platforms. Another term for offline storage is “cold storage,” which requires that you plug in the hardware wallet to a computer to access your crypto assets.
Once accessed, you can transfer your crypto assets from the online cryptocurrency exchange to the hardware device. Private keys remain on the devices, which only you have access to.
Hardware wallets are the most secure way to store your cryptocurrencies. Although they are not as easily accessible, compared to online wallets, cold storage eliminates the risk of having your crypto assets hacked or stolen. Also, in case you misplace your wallet, you can always restore your coins to a new wallet (as long as you have a recovery phrase).
Additionally, if you’re looking to store multiple cryptocurrencies for a long time, then hardware wallets are the best choice.
These are free and non-physical online programs that you access using your computer. The wallet is encrypted and requires a password to access the cryptocurrencies you have stored. Similar to hardware wallets, if you forget your password or your computer is hacked, you can recover your digital coins by using a recovery phrase.
However, these wallets are connected to the internet and therefore are exposed and susceptible to any virus or human activity that could threaten your assets and the security of your password. Any recovery phrase on your screen can be seen by a hacker, making online wallets much less secure than hardware wallets.
Online wallets are web-based and operate in the cloud and offer unparalleled accessibility. You can access your crypto coins from anywhere in the world with an internet connection. Online wallets offer a great solution for users who want to store small amounts of cryptocurrencies and for everyday and small purchases. Abra, for example, is a popular app you can download that allows you to easily and smoothly trade cryptos; but you'll want to transfer your big investments to an offline hardware wallet like Trazor One, Trezor Model T, or Ledger for maximum peace of mind.
The wallet to use
Hardware wallet remains the best and most secure wallets for your coins. To browse hardware wallet options at affordable prices, click here and choose one that best suits your crypto investing needs.